S&P rates Coherent loans BB

S&P said it assigned a BB corporate credit rating to Coherent Inc.

The agency also said it assigned a BB rating and 3 recovery rating to the company's proposed $100 million senior secured revolving credit facility due 2021 and $750 million senior secured term loan due 2023.

The 3 recovery rating on the term loan indicates 50% to 70% expected default recovery.

The outlook is stable.

The ratings are based on the company's position as a diversified provider of laser solutions with improved scale after the recent Rofin acquisition, as well as growth opportunities in OLED displays and fiber lasers, S&P said.

The stable outlook considers that Coherent should successfully integrate the acquisition and deliver consistent operating performance while generating free cash flow of about $80 million or better annually, the agency said.

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