S&P shifts KNEL view to stable

S&P said it revised the outlook for KNEL Acquisition LLC to stable from negative.

KNEL extended the maturity on its revolver and first-lien term loan to 2023 from 2021. It also extended the second-lien term loan to 2024 from 2022, strengthening the company’s liquidity position, the agency said.

“Credit metrics should improve with improved operating efficiencies as well as the execution of the debt maturity extension. The company’s adjusted EBITDA margin improved to 8.6% for the second quarter ended June 30, 2020, driven by enhanced efficiency, cost reductions, and yield improvements at its production facilities,” S&P said in a press release.

The outlook reflects S&P’s view KNEL will continue improving profitability through stronger operating efficiency and generating positive free cash flow above debt amortization payments over the next 12 months.

The agency affirmed the B- ratings on the company and its senior secured first-lien credit facilities. S&P also affirmed the CCC rating on the senior secured second-lien term loan. The recovery ratings remain 3 and 6, respectively.

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