S&P rates KNEL loans B, CCC+

Standard & Poor’s said it assigned a B corporate credit rating to KNEL Acquisition LLC.

KNEL is the newly formed ultimate parent company of Nellson Nutraceutical LLC, which is acquiring Les Aliments Multibar Inc. and refinancing its existing date.

Nellson and Les Aliments are the borrowers of the credit facilities, S&P said.

The agency also said it assigned a B rating to the company’s $65 million revolving credit facility due 2019 and $240 million first-lien term loan due 2021 with a 3 recovery rating. The 3 recovery rating indicates 50% to 70% expected default recovery.

S&P also said it assigned a CCC+ rating to the company’s proposed $73 million second-lien facility due 2022. The 6 recovery rating indicates 0 to 10% expected default recovery.

The outlook is stable.

The ratings reflect the company’s substantial debt obligations, financial sponsor ownership and narrow business focus, the agency said.

S&P said it expects that the company will remain highly leveraged with debt leverage at more than 5x during the next 12 months, despite an expectation for some debt reduction.

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