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S&P rates Duke Finance loans B, B-
Standard & Poor's said it assigned its B corporate credit rating to Duke Finance LLC (a subsidiary of OM Group Inc.).
The outlook is stable.
At the same time, the agency assigned its B issue-level rating to the company's proposed $75 million revolving credit facility due 2020 (undrawn at close) and $450 million first-lien term loan due 2022. The 3 recovery rating indicates an expectation of meaningful (50%-70%; lower half of the range) recovery in the event of a payment default.
Additionally, S&P assigned its B- issue-level rating to the company's proposed $125 million second-lien facility due 2023. The 5 recovery rating indicates an expectation of modest (10%-30%; lower half of the range) recovery in the event of a payment default.
Proceeds from the proposed facilities, along with a $215 million common equity contribution from funds affiliated with Apollo, will be used to fund Duke’s acquisition by funds affiliated with Apollo Global Management LLC, pay $90 million in transaction fees and expenses and set aside $45 million of cash on its balance sheet for restructuring purposes.
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