S&P rates Morsco loan B

S&P said it assigned a B corporate credit rating to Morsco Inc.

The agency said it assigned a B rating to Morsco's proposed $300 million first-lien senior secured term loan due 2023. The 3 recovery rating indicates 50% to 70% expected default recovery.

The outlook is stable.

Morsco is acquiring waterworks distributor Fortiline Waterworks, S&P said.

Morsco intends to obtain $650 million in senior secured credit facilities, consisting of a $350 million asset-based lending revolving credit facility and $300 million term loan, the agency said.

The stable outlook reflects an expectation that Morsco will maintain operational performance levels that will result in pro forma leverage measures of about 6x during the next 12 months, S&P said.

A downgrade is likely within the next 12 months if Morsco has weaker-than-expected EBITDA or a more aggressive financial policy increases total leverage at more than 7x and trending toward 8x, the agency said, or if liquidity materially lessens.

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