S&P rates Authentic Brands loans B+, CCC+

Standard & Poor’s said it affirmed the B corporate credit rating on Authentic Brands Group LLC.

The agency also said it assigned a B+ rating to the company’s proposed $35 million delayed-draw first-lien term debt with a recovery rating of 2, indicating 70% to 90% expected default recovery.

S&P also assigned a CCC+ rating to the company’s proposed $15 million delayed-draw second-lien term debt with a recovery rating of 6, indicating 0 to 10% expected default recovery.

The agency also said it affirmed the B+ ratings with recovery ratings of 2 to the company’s existing first-lien term facility comprised of a $30 million revolver, $320 million first-lien term debt and the proposed $85 million incremental first-lien term debt.

S&P also said it affirmed the CCC+ rating with recovery rating of 6 on the company’s second-lien facility comprised of a $105 million second-lien term debt and proposed $60 million incremental second-lien term debt.

The outlook is stable.

ABG Intermediate Holdings 2 LLC is the borrower of the revolver, the first- and second-lien term loans and the delayed draw term loans.

The ratings reflect the company’s highly leveraged capital structure, underscored by the incremental debt issuance with this proposed transaction, S&P said.

Pro forma for the transaction, the agency said it estimates leverage will increase to the low-6x range from about 5.6x as of March 31.

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