S&P rates BW Holding, loans B-

S&P said it gave B- ratings to BW Holding Inc. (Brook & Whittle) and its planned $478 million first-lien term loan due in 2028 and $50 million revolver due in 2026. The recovery rating on the loans is 3, indicating an expectation for meaningful recovery (50%-70%; rounded estimate: 55%) in default.

“Our ratings on BW Holding reflects its position as a relatively small player in the competitive and fragmented North American label market, with good profitability. BW Holding provides sustainable premium prime label solutions to consumer product goods customers, with tenured customer relationships (the top 10 customers average 14 years). Its focus on specialized, sustainable solutions, broader demand from its customers and end users, and patented material technologies should provide a continued competitive advantage, in our view,” S&P said in a press release.

Genstar Capital will use the term loan proceeds and a $169 million second-lien term loan, including a $25 million delayed-draw term loan to partly fund its acquisition of BW.

The outlook is stable. The agency said it sees BW Holding’s S&P Global Ratings-adjusted debt to EBITDA at about 9x pro forma for the transaction in 2021 and remaining at about 8x through 2022.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.