S&P assigns B- to LG Parent loan

S&P said it assigned a B- issue-level rating to LG Parent Holdco Inc.’s planned $285 million five-year first-lien term loan with a 4 recovery rating, indicating average (30%-50%; rounded: 40%) recovery in default. The company's $150 million due in 2025 after the close of this transaction will be withdrawn. LG is the parent of Libbey Glass LLC.

LG plans to use the proceeds to repay the company's $132 million outstanding term loan and $126 million of convertible preferred shares, and use the remainder to pay prepayment premiums, original issuance discounts and transaction costs.

Libbey's cost of capital will decrease and the term loan maturities will be extended to 2027 from 2025, S&P said

“We view this transaction as relatively neutral for leverage with estimated pro forma leverage of about 4x, given we view the preferred shares currently outstanding as debt-like obligations. As a result, we affirmed our B- issuer credit rating on the company,” the agency said.

The outlook is stable.

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