S&P gives B+ to Kemet yen loan

S&P said it assigned its B+ issue-level rating and 3 recovery rating to Kemet Corp.'s ¥33 billion term loan due 2024. The 3 recovery rating indicates an expectation for meaningful (50% to 70%; rounded estimate: 65%) recovery in the event of a payment default.

Kemet is the parent company of Tokin Corp., the company's Japanese subsidiary and borrower of the yen-denominated term loan.

“We expect the company to use the proceeds from the proposed term loan, in addition to cash on hand, to prepay in full the company's existing term loan credit agreement ($323.4 million outstanding as of June 30, 2018),” S&P said in a news release.

The new term loan facility is split equally between a term loan A tranche and a term loan B tranche, with each tranche consisting of ¥16.5 billion ($148 million).

“Our B+ issuer credit rating on Kemet is unchanged. We rate the new term loan at the same level as our issuer credit rating on the company,” S&P said in a news release.

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