S&P downgrades Onvoy loan to B

S&P said it lowered its issue-level rating on Onvoy LLC's senior secured first-lien credit facility to B from B+ and revised the recovery ratings to 3 from 2.

The facility consists of a $35 million revolver due in 2022 and a $550 million term loan B due in 2024, which is being upsized from $500 million. The 3 recovery rating indicates an expectation for meaningful (50%-70%; upper half of the range) recovery in the event of a default.

S&P said the action follows the company's proposal to upsize the first-lien term loan while reducing the size of the second-lien term due in 2025 to $130 million from $180 million. The first-lien term loan add-on increases the amount of first-lien debt at default compared with the agency’s previous analysis, which dilutes recovery prospects for first-lien debtholders.

The upsizing does not affect the B corporate credit rating or stable outlook on Onvoy because credit measures, including adjusted debt to EBITDA in the mid-5 times area, are unchanged from the revision in the capital structure, S&P explained.

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