S&P assigns B- to Sabre notes

S&P said it assigned B- issue-level and 4 recovery ratings to Sabre Corp.'s planned $955 million of senior secured notes due 2027. The 4 recovery rating indicates an average (30%-50%; rounded estimate: 35%) recovery in default.

Sabre plans to use the proceeds along with cash to fund an exchange offer for its 9¼% senior secured notes due April 2025 with $105 million outstanding, and its 7 3/8% senior secured notes due September 2025 with $850 million outstanding.

“We also note that debtholders are receiving additional upfront cash consideration and an increase in interest rate to compensate for exchanging their notes for the new notes with a longer tenor,” S&P said in a press release.

“The proposed leverage-neutral transaction modestly improves the company debt maturity profile, partially offset by higher interest costs. Our B- issuer credit rating and stable outlook on Sabre are unchanged, reflecting our expectation that despite weak credit measures, Sabre's business as a global distribution system provider will continue to recover along with global travel volume growth,” the agency explained.

The outlook is stable.

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