S&P rates Charter NEX loans B+, CCC+

Standard & Poor’s said it affirmed its B corporate credit rating and issue-level ratings on Charter NEX US Holdings Inc. The outlook remains stable.

At the same time, S&P assigned a B+ issue rating and a recovery rating of 2 to the company’s $105 million incremental first-lien senior secured term loan. The 2 recovery rating indicates an expectation of substantial (70% to 90%) recovery in the event of a payment default.

The senior secured credit facilities now consist of a $50 million five-year revolver, a $270 million seven-year first-lien term loan and the incremental $105 million seven-year first-lien term loan.

S&P also assigned a CCC+ issue rating and recovery rating of 6 to the company’s incremental $55 million second-lien term loan. The 6 recovery rating indicates an expectation of negligible (0% to 10%) recovery in the event of a payment default.

“The stable outlook reflects our expectation that the company will restore adjusted debt to EBITDA to 5x to 6.5x by the end of 2016,” said S&P credit analyst Henry Fukuchi, in a news release. “We expect that the high EBITDA margins, good cash flow generation, and EBITDA contribution from the acquisition should be supportive of reaching the adjusted debt to EBITDA ratio of between 5.0x and 6.5x in the next 12 months, which we consider appropriate for the rating.”

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