S&P rates Avantor loans B, CCC+

S&P said it lowered the corporate credit rating on Avantor Performance Materials Holdings SA to B from B+.

The agency also said it assigned a B rating and 3 recovery rating to the proposed first-lien credit facility consisting of a $670 million term loan B and $50 million revolving credit facility.

The 3 recovery rating indicates 50% to 70% expected default recovery.

S&P also said it assigned a CCC+ rating and 6 recovery rating to the company's proposed $165 million second-lien term loan.

The 6 recovery rating indicates 0 to 10% expected default recovery.

The outlook is stable.

The debt is to be issued by Avantor Performance Materials Holdings Inc. and guaranteed by Avantor Performance Materials Holdings, the agency said.

The downgrade of Avantor Performance reflects the increased debt following the closure of the announced dividend recapitalization, S&P explained.

As a result of the company's weakened credit measures following the transaction, the agency said it revised its financial risk profile to highly leveraged from aggressive, the agency said.

Its adjusted debt-to-EBITDA is expected to be more than 6x immediately following the transaction and remain at more than 5x on a sustainable basis, S&P said.

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