S&P rates Cordis parent, loans B-

S&P said it assigned B- ratings to Bayou Topco Inc., the newly formed parent of Cordis Corp., and its $60 million revolver and $350 million secured term loan.

Bayou Topco will be the parent for the carve-out acquisition Cordis from Cardinal Health by Hellman & Friedman LLC. “We expect adjusted debt to EBITDA of 5x-6x in fiscal 2022. We also project the carve-out process, which we view as a key risk over the next few years, will lead to a cash flow deficit in fiscal 2022 and minimally positive free cash flow in 2023,” S&P said in a press release.

The outlook is stable. The outlook reflects the expectation for a post-pandemic rebound in demand, improving margins and that Cordis has enough cash to emerge from the carve-out process and return to positive free cash flow by fiscal 2023 (ending June 30, 2023), the agency said.

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