S&P rates Golden State Buyer loans B-, CCC

S&P said it assigned a B- issuer credit rating to Golden State Buyer Inc., doing business as Golden State Medical Supply Inc. (GSMS).

At the same time, S&P assigned a B- issue-level rating and 3 recovery rating to the company's first-lien debt and assigned a CCC issue-level rating and 6 recovery rating to its second-lien debt.

The outlook is stable.

“The ratings reflect GSMS' small size and very narrow business focus in a niche market of reselling generic drugs to the VA and DoD. These weaknesses are only partially offset by GSMS' leading position within its niche market, numerous partnerships with generic manufacturers, and significant expertise and extensive relationships within the complex federal government contract procurement process,” S&P said in a news release.

Court Square Capital Partners is acquiring Golden State Medical Supply in a debt-funded transaction.

The company's pro forma capital structure will include a $40 million five-year revolving credit facility, undrawn at close, a $300 million seven-year senior secured first-lien term loan and a $130 million eight-year senior secured second-lien term loan.

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