S&P lifts Language Line, rates loans B, CCC+

Standard & Poor’s said it raised the corporate credit rating on Language Line Holdings LLC to B from B-.

The agency also said it assigned a B rating with a recovery rating of 3 to the company’s proposed $530 million senior secured first-lien credit facility.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The senior secured first-lien credit facility includes a $50 million revolving credit facility and a $480 million senior secured first-lien term loan.

S&P also said it assigned a CCC+ rating with a recovery rating of 6 to the company’s proposed $160 million senior secured second-lien term loan.

The 6 recovery rating indicates 0 to 10% expected default recovery.

The outlook is stable.

The upgrade is based on Language Line’s improved margin of compliance with financial covenants under the proposed refinancing terms, S&P said.

The company’s EBITDA cushion of compliance was less than 5% as of March 31, the agency said.

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