S&P affirms Husky on add-on

S&P said it affirmed the B rating with a 3 recovery rating on Husky IMS International Ltd.'s first-lien debt following news that the company is seeking to increase the aggregate principal amount of its first-lien secured term loan under its existing credit agreement by $160 million.

All of the other ratings on the company are unchanged, including its B long-term corporate rating.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The outlook is stable.

The proceeds from the incremental term loans, together with some cash, will be used to redeem all of its $161 million second-lien debt outstanding, as well as to pay related fees and expenses.

After the transaction, the agency said it expects to withdraw the ratings on the second-lien debt.

The ratings are based on the company’s leading position in the niche plastic injection molds and systems market, S&P said, and an expectation of adjusted debt-to-EBITDA remaining higher than 5.5x over the next two years.

The ratings also consider Husky’s fair business risk profile and highly leveraged financial risk profile, the agency said.

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