S&P gives Winnebago loan BB

S&P said it assigned a BB issue-level rating to Winnebago Industries Inc.’s new $260 million senior secured term loan, issued by wholly owned subsidiary Octavius Corp. and guaranteed by Winnebago.

The BB- corporate credit rating and stable outlook are unchanged.

The company closed a repricing of its $300 million senior secured term loan due in by issuing a new $260 million term loan and drew $19.7 million on its existing unrated $125 million asset-based revolver. Proceeds were used to retire outstanding balances drawn under the prior facility.

Although the transaction is leverage neutral, the BB rating on the new term loan is higher than the BB- rating on the prior term loan because recovery prospects improve for secured lenders due to a lower level of assumed outstanding borrowings in a simulated default scenario, the agency explained.

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