S&P gives MWI loan B-, ups ratings

S&P said it gave B- and 3 recovery ratings to the planned $95 million first-lien term loan to be issued by Helix Acquisition Holdings Inc. (MWI Holdings Inc.). The 3 recovery rating indicates an expectation of 50%-70% recovery (rounded estimate: 55%) in default.

Concurrently, the agency upgraded the issuer and first-lien term loan to B- from CCC+ and the $120 million second-lien term loan to CCC from CCC-. The recovery ratings remain 3 and 6, respectively. MWI also plans to extend the maturity of its $70 million revolver to 2024 from 2022.

MWI plans to use the proceeds to help finance two acquisitions for a total of $101 million.

“The acquisitions will modestly enhance MWI's scale, customer base, and product offerings. With these acquisitions, MWI will further diversify its end-market exposure, increase its ability to cross-sell with customers, and add new customers and product offerings. In addition to the planned cost synergies that MWI expects, both companies operate at higher margins than MWI. Given this dynamic, we believe the acquisitions will contribute positively to margin growth over the next year,” S&P said in a press release.

The outlook is stable.

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