S&P rates ALG loans B+, CCC+

Standard & Poor's said it affirmed the B corporate credit rating on ALG Intermediate Holdings BV.

The outlook is stable.

The agency also said it assigned a B+ rating and 2 recovery rating on ALG's subsidiaries ALG BV’s, BV Borrower II’s and ALG USA Holdings LLC’s proposed first-lien credit facilities comprised of a $50 million revolver due 2020 and $330 million first-lien term loan due 2022.

The 2 recovery rating indicates 70% to 90% expected default recovery.

S&P also said it assigned a CCC+ rating and 6 recovery rating to the subsidiaries' proposed $130 million second-lien term loan due 2023. The 6 recovery rating indicates 0 to 10% expected default recovery.

The proceeds from the proposed transactions will be used to refinance existing debt and pay a $250 million dividend to its sponsor Bain Capital, the agency said.

The ratings reflect an expectation that EBITDA coverage of interest expense will remain good at about 2x despite an expectation that leverage will increase by more than 3x to finance the planned sponsor dividend, S&P said.

The ratings also consider an expectation of moderate consumer-spending growth, continued realization of revenue and cost synergies from acquired distribution businesses and reasonable cost control, the agency said.

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