S&P cuts Harlan, rates loans B- & CCC+

Standard & Poor's said it lowered its corporate credit rating on Harlan Laboratories Inc. to B- from B.

The outlook is negative.

At the same time, S&P assigned the company's new senior secured credit facilities (consisting of a $20 million revolving credit facility due 2016 and a $200 million term loan due 2016) its B- issue-level rating with a recovery rating of 3.

In addition, the agency assigned the company's second-lien term loan its CCC+ issue-level rating with a recovery rating of 5.

S&P said the downgrade reflects its expectation that cash flows will be minimal under the new capital structure, and that EBITDA growth will be insufficient to enable Harlan to generate cash to repay debt over the near term.

The ratings on Harlan reflect its highly leveraged financial risk profile, characterized by leverage of about 6.6 times as of Dec. 31, 2012, and the expectation that discretionary cash flow will be negative in 2013 and minimal in 2014, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.