S&P rates Savers, loan B

S&P said it gave B ratings to S-Evergreen Holding Corp. (Savers) and its planned $600 million senior secured first-lien term loan. The loan’s recovery rating is 3.

Ares Management plans to acquire Savers.

“Savers has generated positive comparable sales growth for more than 20 consecutive years in both major geographies, benefiting from its recession-resistant business model of affordable prices, value proposition, and trade-down effect. However, operational missteps by past management and shifting industry dynamics within the recycling business resulted in historical performance challenges and deteriorating profitability,” S&P said in a press release.

The agency said it forecasts Savers’ S&P Global Ratings-adjusted leverage to be about high-4x in 2021 before declining to the mid-4x area in 2022.

The outlook is stable.

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