S&P gives Gates loan B+

S&P Global Ratings said it gave its B+ issue-level and 3 recovery ratings to Gates Global LLC's planned $575 million senior secured dollar-denominated term loan.

The company plans to use the proceeds along with cash from the balance sheet to repay its euro-denominated senior secured term loan, which had an outstanding balance of about $552 million as of Oct. 1, and fund transaction expenses and fees.

After the transaction closes, the company plans to enter a swap arrangement that exchanges a substantial portion of the notional amount of the proposed dollar-denominated senior secured term loan for euros to better match the currency profile of its debt obligations with that of its earnings.

“Our B+ issue-level rating on the company's senior secured credit facilities and B issue-level rating on the senior unsecured notes are unchanged,” S&P said in a press release.

The 3 recovery rating on the company's senior secured credit facilities indicates meaningful (50%-70%; rounded estimate: 65%) recovery and the 5 recovery rating on the senior unsecured notes indicates modest (10%-30%; rounded estimate: 15%) recovery in default.

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