S&P gives B- to UKG add-on loan

S&P said it assigned B- issue-level and 3 recovery ratings to UKG Inc.'s planned $400 million non-fungible incremental first-lien term loan due May 2026. The 3 recovery rating indicates meaningful (50%-70%; rounded estimate: 55%) recovery if UKG defaults.

At the same time, S&P said it affirmed the B- issue-level rating on the company's outstanding first-lien senior secured debt, which will rank equally with this incremental non-fungible first-lien term loan, and the CCC issue-level rating on its secured second-lien debt.

UKG will use the proceeds to repay borrowings on its revolver and will use any remaining funds for general corporate purposes, including to pay transaction-related expenses, bolster its liquidity and potentially fund future acquisitions.

The outlook remains negative.

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