S&P: Element Materials loan B

S&P said it assigned a B rating to the proposed $95 million capital expenditure and acquisition facility due 2023 borrowed by EMT 2 Holdings Ltd. and Element Materials Technology Group US Holdings Inc.

The recovery rating is 4, indicating 30% to 50% expected default recovery.

The agency also said it affirmed the B long-term corporate credit rating on parent company Element Materials Technology Ltd.

The outlook is stable.

S&P also said it affirmed the B rating on the existing senior secured term loans due 2023 borrowed by EMT 2 Holdings Ltd. and Element Materials Technology.

The rating actions follow Element's plans to issue about $95 million senior secured first lien debt, which will be executed under the existing senior facilities agreement, the agency said.

The new debt will be undrawn at closing, but will be used to extend the group's existing $70 million acquisition and capital expenditure facility.

Following the issuance, the two facilities will be entirely fungible, S&P said.

To date, Element has used the majority of the availability under the existing $70 million facility to expand through bolt-on acquisitions, the agency said.

Some of the new facility has been ear-marked for near- and mid-term acquisitions to increase its testing capabilities in the aerospace, transport and infrastructure, S&P said, and oil and gas sectors.

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