S&P gives Owens & Minor notes B-

S&P said it gave B- issue-level and 6 recovery ratings to Owens & Minor Inc.’s proposed $500 million of unsecured notes. The 6 recovery rating indicates an expectation for negligible (0%-10%; rounded estimate: 0%) recovery in default.

Owens & Minor plans to downsize its revolver capacity to $300 million from $400 million and upsize its unrated accounts receivables facility to $450 million from $325 million.

The company intends to use the proceeds to repay borrowings under the revolver, refinance the term loan B and pay related fees and expenses.

“The transaction is leverage neutral,” S&P said in a press release.

The agency also revised the senior secured debt’s recovery rating for the 2024 senior secured notes to 3 from 4. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in default. The issue-level rating for the secured notes remains unchanged at B+.

The agency also gave a B+ issue-level rating and 3 recovery rating (rounded estimate 60%) to the new revolver to be issued by Owens & Minor Distribution Inc.

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