S&P rates John Henry loans B

Standard & Poor's said it affirmed the B corporate credit rating on Multi Packaging Solutions Inc., and assigned a B rating to John Henry Holdings Inc.'s proposed $245 million senior secured credit facilities. The credit facilities include a $30 million revolving credit facility and a $215 million term loan and are guaranteed by Multi Packaging. The agency also said it assigned a recovery rating of 3, indicating an expectation of 50% to 70% recovery in the event of default. The ratings are based on preliminary terms and conditions.

The outlook is stable.

The proceeds will be used to refinance existing first- and second-lien debt and extend the company's debt maturity profile, S&P said. Funds will also be used to pay an $80 million dividend to preferred shareholders that had accrued under the series B preferreds, the agency said.

The ratings reflect expectations that Multi Packaging will continue to generate sufficient cash flows to fund growth objectives and maintain credit measures appropriate for the current ratings, S&P said.

The ratings also consider the relatively narrow scope of its operations, limited customer and end-market diversity, competition that includes larger and financially stronger companies and a highly leveraged financial profile, the agency said.

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