S&P rates KBR facility BB-

S&P said it assigned its BB- issue-level rating and 3 recovery rating to KBR Inc.'s new first-lien credit facility, which will comprise a $500 million revolver, a $500 million performance letter of credit facility, a $165 million term loan A-2 due 2025 and a $520 million term loan B due 2027. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery.

At the same time, S&P assigned a BB+ issue-level rating and a 1 recovery rating to the $110 million term loan A-1 due 2025 held at KBR's Australian subsidiary Kellogg Brown & Root Pty Ltd. The 1 recovery rating indicates the expectation for very high (90%-100%; rounded estimate: 95%) recovery.

The company plans to use the proceeds to refinance and pay down its credit facility. “Although the transaction will reduce KBR's balance sheet debt and interest expense, we do not believe it will materially affect our expected credit ratios,” S& P said in a press release. The issuer credit rating on KBR is unchanged

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