S&P rates Keurig BB-, loans BB

Standard & Poor's assigned its BB- corporate credit rating to Maple Holdings Acquisition Corp., operating as Keurig Green Mountain Inc. The outlook is stable.

At the same time, S&P assigned its BB issue-level ratings to the company's proposed first-lien credit facilities, including a $500 million revolving facility due 2021, a $2.95 billion term loan A due 2021, a $2.675 billion term loan B due 2023, and a $275 million (roughly €250 million) euro-denominated term loan B due 2023.

The recovery rating on the first-lien term loans is 2, reflecting S&P’s expectation of substantial (70% to 90%, in the upper half of the range) recovery in the event of a default.

“The ratings on KGM reflect the company's high financial leverage after the leveraged buyout, deleveraging focus, leading position in single-serve coffee brewers and K-Cups in the U.S., participation in the fastest-growing sector of the coffee industry, and lack of product and geographic diversity,” S&P credit analyst Diane Shand in a news release.

“The stable outlook reflects S&P’s expectation that the company will prioritize deleveraging and use internally generated cash for debt repayment. The agency also expects the company to generate sales growth by improving marketing and expand margins through cost reductions over the next 12 months,” said Shand.

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