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S&P rates Madison B-, loans B-, CCC
S&P said it assigned B- ratings to Madison Safety & Flow Holdings LLC and its planned first-lien credit facilities. The recovery rating is 3. The agency also gave Madison Safety’s expected second-lien term loan CCC issue and 6 recovery ratings.
Madison Safety agreed to acquire Safe Fleet Holdings LLC for $1.53 billion from Oak Hill Capital Partners. The funding includes three new debt facilities: a $120 million first-lien revolver, undrawn at close, $925 million first-lien term loan and $275 million second-lien term loan.
“Our B- issuer credit rating on Madison Safety reflects high S&P Global Ratings-adjusted leverage, concentrated geographic footprint and relatively limited scale. The company's strengths include high EBITDA margins, favorable secular trends in its key end markets, and recurring revenue stream from its aftermarket business, albeit within a relatively narrow scope of operations,” the agency said in a press release.
S&P said it sees expect Madison Safety improving leverage to the S&P Global Ratings-adjusted debt to EBITDA in the mid-6x area from the mid-7x area at transaction close over the next 12 months, mostly through earnings growth.
The outlook is stable.
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