S&P cuts Sorenson

S&P said it lowered Sorenson Communications LLC’s issuer rating to B- from B, citing Ariel Alternatives LLC’s expected leveraged buyout of the company. Ariel is buying a 52% stake in the company.

Sorenson plans to sell unrated series A and B Holdco payment-in-kind (PIK) notes totaling $589 million, which it will use–with $108 million of new common equity from its sponsor–to fund the LBO. The company's first-lien debt will remain unchanged.

“Pro forma for the transaction, we expect Sorenson's leverage will increase to about 5x from 2.6x as of Sept. 30, 2021,” S&P said in a press release.

The outlook is stable.

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