S&P lifts Wyle, rates loans BB

Standard & Poor's said it raised its corporate credit rating on Wyle Services Corp. to B+ from B.

The outlook is stable.

At the same time, the agency assigned its BB issue-level rating and 1 recovery rating to the proposed $285 million senior secured credit facility, consisting of a $35 million revolving credit facility due 2019 and a $250 million senior secured term loan due 2021. The 1 recovery rating indicates that lenders can expect a very high (90% to 100%) recovery of principal in the event of a payment default.

Proceeds, along with about $161 million of cash on hand, will be used to repay the $225 million term loan outstanding, its $175 million senior subordinated notes including prepayment premium and other fees and expenses.

"We base our upgrade on Wyle's improved financial risk profile to 'aggressive' from 'highly leveraged,' as the company's debt-to-EBITDA ratio will decrease to 3.6x at close of the refinancing transaction from 5.6x at the end of 2013, and our expectation that the company will maintain debt leverage at or below 5x," S&P credit analyst David Tsui said in a news release.

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