S&P trims SCS Holdings

S&P said it lowered its corporate credit rating to B from B+ on SCS Holdings I Inc. The outlook is stable.

At the same time, S&P lowered its issue-level rating to B from B+ on the company's $879 million first-lien credit facility, comprising a $60 million revolving credit facility due in 2020 and a $819 million first-lien term loan due in 2022. The recovery rating remains 3, indicating an expectation of meaningful (50%-70%; rounded estimate: 55%) recovery for first-lien debtholders in the event of default.

S&P also lowered its issue-level rating to CCC+ from B- on the company's $153 million second-lien term loan due in 2023. The recovery rating remains 6, indicating an expectation of negligible (0%-10%; rounded estimate: 0%) recovery for second-lien debtholders.

“The downgrade reflects our view of Sirius' weakened financial risk profile, with S&P Global Ratings' adjusted pro forma leverage rising to the high-5x area from the mid-5x area, given the addition of $342 million in total debt to fund the Forsythe acquisition,” S&P said in a news release.

“Our expectation is for leverage to fall to the mid-5x area in the next 12 months due to debt repayment, synergies, and a return to operating growth in the second half of 2017.”

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