S&P puts Constellis on positive watch, new loan B-

S&P said it placed the B corporate credit rating on Constellis Holdings LLC on CreditWatch with positive implications.

The agency also said it assigned a B+ rating and 3 recovery rating to the company's proposed $75 million revolver due 2022 and $725 million first-lien term loan due 2024.

The 3 recovery rating indicates 50% to 70% expected default recovery.

S&P also said it assigned a B- rating and 6 recovery rating to Constellis' proposed $215 million second-lien term loan due 2025. The 6 recovery rating indicates 0 to 10% expected default recovery.

The rating assigned to the debt is based on a belief that the agency will raise the company's corporate credit rating to B+ when the transaction closes, the agency explained.

The positive watch reflects an expectation that the company's scale and diversity will improve following its acquisition of Centerra, though its margins may decline somewhat, S&P said.

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