S&P cuts PlayPower view to negative, rates loans B, CCC+

S&P said it revised its outlook on PlayPower Holdings Inc. to negative from stable and affirmed the B issuer credit rating on the company.

S&P assigned a B issue-level rating to the proposed first-lien credit facility. S&P also assigned a CCC+ issue-level rating to the proposed second-lien term loan.

PlayPower Holdings plans to issue a $45 million revolving credit facility due 2024, a $340 million first-lien term loan due 2026 and a $100 million second-lien term loan due 2026, which will be issued by PlayPower Inc. Proceeds will be used to refinance existing debt and pay a dividend to financial sponsor Littlejohn & Co. LLC.

“We are revising our outlook to negative from stable, reflecting our forecast for adjusted EBITDA interest coverage through 2020 to be about 2.1x, close to our downgrade threshold of 2x, which could be breached if operating performance deteriorates or the economy weakens,” S&P said in a news release.

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