S&P trims AI Aqua

S&P said it cut the ratings for AI Aqua Sarl and its senior secured first-lien issue-level ratings (including $200 million of incremental debt) to B- from B with an unchanged recovery rating of 3 (55% rounded estimated recovery in a simulated default).

The agency also lowered the senior secured second-lien issue ratings to CCC from CCC+ with an unchanged recovery rating of 6 (0% rounded estimate recovery).

AI is seeking $200 million of incremental first-lien debt, which it will use with $65 million of common equity from its financial-sponsor owners to repay about $70 million in short-term borrowings and fund $114 million in several pending acquisitions while providing itself with added liquidity, S&P said.

“S&P Global Ratings estimates the company’s pro forma leverage is 9.7x (closer to 8x excluding one-time costs), which remains above our 8.0x leverage downgrade trigger, and could remain elevated at these levels given the company's continued acquisition growth strategy,” the agency said in a news release.

The outlook is stable.

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