S&P rates Astro loans B+, B-

Standard & Poor’s said it assigned a preliminary B+ issuer credit rating on Astro AB Borrower Inc.

The outlook is stable.

The agency also said it assigned a preliminary B+ rating on the company’s proposed $260 million first-lien senior secured credit facility, comprised of a $220 million seven-year first-lien senior secured term loan and a $40 million five-year revolving credit facility.

S&P also said it assigned a B- rating on the company’s proposed $90 million eight-year second-lien senior secured term loan.

The agency also said it assigned a preliminary recovery rating of 3 to the first-lien credit facility and a preliminary recovery rating of 6 to the second-lien senior secured term loan.

The ratings are based on the company’s high debt leverage, sponsor ownership and limited market position, S&P said.

Several factors, however, offset the company’s weaknesses. Partially as a result of a low fee structure, the company maintains extremely good investment performance, the agency said. The company also maintains stronger EBITDA margins than most asset managers because of its low operating expenses, S&P said.

In November, American Beacon Advisors Inc. announced that its parent company, Lighthouse Holdings Inc., reached a definitive agreement to be acquired by funds affiliated with Kelso & Co. and Estancia Capital Management, the agency said.

As a result of the transaction, the newly formed holding company, Astro, will own 100% of American Beacon, S&P said.

The transaction is expected to close in the second quarter of 2015.

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