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S&P rates Lakeshore, loan B
S&P said it assigned B ratings to Lakeshore Intermediate LLC and its planned $580 million first-lien term loan. The loan’s recovery rating is 3, indicating meaningful (50%-70%; rounded estimate: 55%) recovery in default.
Leonard Green & Partners LP plans to use the loan and $585 million of equity to buy a 55% stake in Lakeshore Learning Materials LLC. The founding family will keep a 45% stake and rollover $480 million.
Lakeshore Intermediate will merge into Lakeshore Learning, which will become the surviving entity and the borrower. Lakeshore Intermediate also plans to raise a $100 million asset-based lending facility, expected to be undrawn at close.
“The ratings on Lakeshore reflect its high leverage, majority financial sponsor ownership, and narrow product focus in a highly fragmented industry as well as its market leadership position, track record of sustainable organic growth, favorable industry tailwinds and good cash flow generation,” S&P said in a press release.
The outlook is stable.
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