S&P cuts Darling Ingredients, facilities to BBB-

S&P said it reviewed its recovery and issue-level ratings for Darling Ingredients Inc. and its subsidiaries that were labeled as "under criteria observation" (UCO) after publishing its revised recovery ratings criteria on Dec. 7.

In addition, the company recently amended its credit facility which, among other changes, extended the maturity dates of the revolving credit facility and term loans A.

With its criteria review completed, S&P said it removed the UCO designation from all Darling issue-level ratings and lowered the issue-level ratings to BBB- from BBB on the company's recently extended $1 billion revolving credit facility now maturing in 2021 (co-borrowed by Darling Ingredients Inc., Darling International Canada Inc., Darling International NL Holdings BV, Darling Ingredients International Holding BV, Darling Ingredients International Financial Services BV and Darling Ingredients Germany Holding GmbH), as well as its extended $200 million ($73.3 million outstanding) U.S. and C$150 million (C$117.6 million outstanding) Canadian term loans A, also maturing in 2021.

The issue-level rating on the term loan B maturing 2021 was also lowered to BBB- from BBB.

All the secured credit facilities have an unchanged 1 recovery rating, indicating a very high recovery in the 90%-100% range.

Under the new criteria, there is a cap on issue ratings at BBB- for companies with BB or BB+ corporate credit ratings. The downgrades of Darling's secured debt reflect the application of this cap.

In addition, S&P said it affirmed the issue-level ratings on the unsecured notes at BB+ and revised the recovery rating to 4, indicating an expectation of recovery at the high end of the 30%-50% range, from 3.

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