S&P rates Acrisure loans B, CCC+

Standard & Poor's said it assigned Acrisure LLC its B long-term corporate credit rating.

The outlook is stable.

At the same time, the agency assigned Acrisure's proposed $470 million first-lien credit facilities, which consist of a $395 million term loan due 2022 and $75 million revolver ($3.5 million drawn at closing) due 2020, its debt rating of B and recovery rating of 3, indicating that lenders could expect an average (50%-70%; in the higher half of the range) recovery in the event of a payment default or bankruptcy.

S&P also assigned the proposed $60 million second-lien term loan due 2022 its CCC+ debt rating and 6 recovery rating (indicating a negligible recovery expectation of 0%-10%).

Acrisure intends to use the proceeds to refinance existing debt and related transaction costs.

S&P said the counterparty credit rating reflects Acrisure's fair business risk profile (BRP) and 'highly leveraged' financial risk profile (FRP) per corporate criteria. Acrisure is a national retail broker offering property/casualty (P/C) and employee benefits insurance and risk management to a broad base of small and middle-market clients.

"We score Acrisure's BRP on the low end of fair reflecting its developing profile and narrow focus in the highly competitive, fragmented, and cyclical middle-market insurance brokerage industry," S&P credit analyst Stephen Guijarro said in a news release.

"Despite its recent track record of robust growth, Acrisure's small revenue base, its product concentration in P/C products – 71% of revenues – and some geographic concentrations in the Midwest and Northeast compare less favorably with many of its rated regional peers with larger revenue bases and wider product and geographic diversification."

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