S&P rates Wesco notes CCC+, CCC-

S&P said it rated Wesco Aircraft Holdings Inc.’s new first-lien notes loan due 2026 with CCC+ with a 3 recovery rating (rounded estimate: 50%) and its new 1.25-lien notes due 2027 CCC- with a 6 recovery rating (rounded estimate: 0%).

Concurrently, the agency upgraded Wesco’s issuer rating to CCC+ from SD, reflecting the view that even with the recent recapitalization the capital structure remains unsustainable. The agency also boosted the issue-level rating on Wesco's previously secured notes to CCC- from D, with a recovery rating of 6 (rounded estimate: 0%).

“Credit metrics remain weak. Wesco took on significant debt to complete its merger with Pattonair in early 2020. The pandemic reduced demand for the company's products and constrained its capacity to reduce debt. The majority of Wesco's commercial aircraft work is tied to original equipment manufacturer (OEM) demand, and we expect demand growth to mirror the recovery in aircraft build rates by Boeing Co. and Airbus SE,” S&P said in a press release.

The outlook is negative.

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