S&P raises Kenan Advantage

S&P said it raised its ratings for Kenan Advantage Group Inc. and its senior secured credit facilities to B from B-. The agency also lifted the rating on the $300 million second-lien term loan due 2027 to CCC+ from CCC. The 3 recovery rating (50%-70%; rounded estimate: 65%) on the senior secured facilities and the 6 rating (rounded estimate: 0%) are unchanged.

“S&P Global Ratings revised upward its view on Kenan's 2022 financial performance following solid first half results. Kenan benefited from higher-than-expected freight rates and continued demand in its key end markets, supported further by volumes from accretive acquisitions. As of June 30, 2022, Kenan's average freight rate was higher across all segments than its fiscal 2021 average year rate. Additionally, recent acquisitions in food, logistics, specialty products, and Canada segments contributed to higher revenue growth, accounting for approximately 35% of the increased volumes,” S&P said in a press release.

The agency said it expects freight rates to decline somewhat through the rest of 2022 and 2023, but does not see a substantial decline in demand for Kenan’s services.

The outlook is stable.

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