S&P rates Brown BidCo B+

S&P said it assigned preliminary B+ ratings to Brown BidCo Ltd., Brown Group Holding LLC and its planned senior secured facilities. The recovery rating on the facilities is 3.

Affiliates of Blackstone Infrastructure Partners, Blackstone Core Equity Partners, Global Infrastructure Partners and Cascade Investment LLC formed Brown to acquire Signature Aviation plc for $4.7 billion.

The new owners plan to finance the acquisition and refinance Signature's debt by issuing a seven-year $1.8 billion senior secured term loan B and a five-year $350 million revolver that will be undrawn at closing. The consortium will finance the remainder with common equity totaling about $4.2 billion.

“Signature has agreed to sell its engine repair and overhaul (ERO) business to StandardAero, as announced on Feb. 17, 2021, and we understand it intends to apply $120 million of net cash proceeds to pre-pay part of the new $1.8 billion TLB, reducing it to $1.68 billion before year-end 2021,” S&P said in a press release.

The agency said it forecasts Signature will maintain relatively high absolute profitability in the coming years, with S&P Global Ratings-adjusted EBITDA margins above 20%.

The outlook is stable.

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