S&P rates Synagro loans B+, CCC+

Standard & Poor's said it assigned bank loan and recovery ratings to Synagro Technologies Inc.'s $540 million of proposed credit facilities, which will consist of a $100 million six-year first-lien revolving credit facility, a $290 million seven-year first-lien term loan B and a $150 million seven-and-a-half year second-lien term loan.

The first-lien facilities are rated B+, one notch above the expected corporate credit rating, with recovery ratings of 1, indicating the expectation of full recovery of principal in the event of default, while the second-lien term loan is rated CCC+ with a recovery rating of 4, the agency said.

The agency noted that the B+ corporate credit rating and other existing ratings on Synagro remain on CreditWatch with negative implications, where they were placed on Jan. 30.

Proceeds of $440 million from the proposed credit facilities and about $277 million in equity contribution from Carlyle will be used to fund the acquisition of Synagro and for the repayment of existing indebtedness, the agency said.

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