S&P rates Lakeside 1 revolver B+, notes B-

Standard & Poor’s said it assigned a B- long-term corporate credit rating to Lakeside 1 Ltd., the holding company of U.K.-based regeneration services provider and housing developer Keepmoat Ltd.

The outlook is stable.

The agency also said it assigned a B+ rating to the £75 million super senior revolving credit facility. The recovery rating on the revolver is 1, indicating 90% to 100% expected default recovery.

S&P also said it assigned a B- rating to the group’s £263 million senior secured notes issued by Keystone Financing plc. The recovery rating on these notes is 4, indicating 30% to 50% expected default recovery.

The ratings reflect Keepmoat’s weak business risk profile and highly leveraged financial risk profile, the agency said.

Keepmoat operates in cyclical and very fragmented markets, which are characterized by low margins and low barriers to entry, S&P said.

The company also relies on government spending and initiatives; the majority of its customers are either public or nonprofit entities, the agency said.

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