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S&P gives Schweitzer-Mauduit loan BB-
S&P said it gave Schweitzer-Mauduit International Inc.’s planned $350 million seven-year senior secured term loan a BB- with a 3 recovery rating and revised the outlook to negative from stable.
S&P also affirmed the company’s BB- rating and the B+ rating with a 5 recovery rating on its senior unsecured notes due 2026.
Proceeds with a draw on its $500 million revolver will be used to acquire Scapa Group plc.
“The negative outlook reflects S&P Global Ratings’ expectation that elevated debt to finance SWM’s acquisition will weaken credit measures over the next 12 months. Though the stretched leverage levels are somewhat mitigated by the large amount of prepayable debt that we expect will enable SWM to deleverage over the next 12 months, we also expect leverage to remain above 4x past 2021,” the agency said in a press release.
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