S&P rates Optiv loans B-, CCC

S&P said it assigned its B- issue-level rating and 3 recovery rating to Optiv Inc.'s proposed $725 million first-lien term loan due in August 2026. The 3 recovery rating reflects an expectation of meaningful (50%-70%; rounded estimate: 60%) recovery for lenders in the event of a default.

S&P also assigned a CCC issue-level rating and 6 recovery rating to the company's proposed $185 million second-lien term loan. The 6 recovery rating reflects an expectation of negligible (0%-10%; rounded estimate: 0%) recovery for lenders in the event of a default.

Optiv intends to use the proceeds from the new debt, combined with balance sheet cash and borrowings under its upsized $300 million ABL revolver (unrated), to repay its existing first- and second-lien term loans, fund an acquisition, and pay fees and expenses related to the transactions.

“Our issuer credit rating on the company remains B-, and the outlook remains stable. The transaction is leverage-neutral, and we forecast S&P Global Ratings-adjusted leverage will remain in the high-6x area in 2023, improving to the low- to mid-6x area in 2024,” S&P said in a news release.

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