S&P affirms Authentic Brands loans

S&P said it affirmed its B issue-level rating on Authentic Brands Group LLC's first-lien debt following the company's announcement that it is issuing a $70 million add-on to its term loan due in 2024.

The recovery rating remains 3, indicating an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default.

In addition, the agency affirmed the CCC+ issue-level rating on the company's second-lien term loan due in 2025 following its proposed $30 million add-on. The recovery rating remains 6, indicating negligible recovery (0%-10%; rounded estimate: 0%) in the event of payment default.

The company will use the proceeds to fund the incremental purchase price consideration of Nine West and Bandolino.

“The offering will increase the company's pro forma debt to EBITDA slightly to 6.1x from 6x, as we projected some incremental EBITDA for the two brands from a combination of higher royalty commitments from March Fisher and Signal Brands and additional international licenses,” S&P said in a news release.

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