S&P rates STI Infrastructure loan B+

Standard & Poor's said it assigned a B preliminary corporate credit rating to STI Infrastructure Sarl.

The outlook is stable.

The agency also said it assigned a preliminary B+ rating and a preliminary 2 recovery rating to the proposed $215 million senior secured term loan due 2020.

The co-borrowers of the secured facilities will be operating companies, Synagro Infrastructure Co. Inc., Synagro Rail Inc. and Synagro Drilling Inc.

The proposed $65 million revolving facility due 2018 is unrated.

Synagro is being purchased by equity sponsor EQT. The company plans to use the proceeds from the new term loan, the equity contribution from EQT and a small amount of revolver borrowings to fund the sale transaction and to pay for pre-petition trade payables, fees and expenses, S&P said.

The agency noted that an additional $3.5 million of the purchase price will be deferred for 60 days after closing and $5 million of the purchase price will be paid six months after closing.

The bankruptcy court overseeing the Chapter 11 proceedings has approved the adequacy of the company's disclosure statement, S&P said.

The agency said it anticipates that the confirmation hearing will occur Aug. 20 with the closing of the financing transaction to occur shortly thereafter.

The ratings reflect the company's weak business risk profile and highly leveraged financial risk profile, S&P said.

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