S&P rates Arctic Glacier loan B-, view to negative

Standard & Poor's said it revised the outlook on Arctic Glacier LLC to negative from stable.

The agency also said it affirmed its B- long-term corporate credit rating.

The outlook revision reflects Arctic Glacier's weakened credit protection measures given the material increase in debt stemming from the proposed refinancing, S&P said.

S&P also said it assigned a B- rating and 3 recovery rating to Arctic Glacier's wholly owned U.S. subsidiary, Arctic Glacier U.S.A. Inc.'s proposed $40 million senior secured first-lien revolving credit facility due 2018 and $260 million senior secured first-lien term loan due 2019.

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

The proceeds of the new term loan, along with a proposed unrated $150 million senior secured second-lien term loan, will be used to refinance existing debt, pay a special $80 million dividend and for general corporate purposes.

The ratings reflect the company's vulnerable business risk profile and highly leveraged financial risk profile, S&P said.

The company has a narrow product portfolio with seasonal demand, the agency said, and it participates in the challenging packaged ice industry, which is highly competitive, commoditized, fragmented and susceptible to unfavorable weather and economic conditions.

Partially offsetting these factors is Arctic Glacier's solid market position in North America as the second-largest player in a fragmented industry, S&P said.

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