S&P affirms Kenan on term loan add-on

S&P said it affirmed the B+ rating on Kenan Advantage Group Inc.'s senior secured credit facilities.

The 2 recovery rating on these facilities is unchanged, indicating 70% to 90% expected default recovery.

S&P also said it affirmed the CCC+ rating on Kenan's $405 million senior unsecured notes due 2023. The 6 recovery rating on the notes is unchanged, indicating 0 to 10% expected default recovery.

Kenan is planning to issue a $125 million incremental term loan to provide it with funding capacity for its acquisition strategy.

This follows the Jan. 31 expiration of the company's $150 million delayed draw term loan, the agency said.

The refinancing transaction will not significantly alter the company's credit metrics, so all of the other ratings on Kenan Advantage are unchanged.

The ratings reflect the company’s participation in the highly competitive and capital-intensive trucking industry, strong position in the delivery of gasoline and certain other liquids and substantial debt burden, S&P said.

The agency said it expects Kenan will maintain debt leverage of less than 6x.

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