S&P rates Optiv loans B, CCC+

S&P said it assigned a B corporate credit rating to Optiv Inc.

The agency also said it assigned a B rating with a recovery rating of 3 to the company's proposed $750 million secured first-lien term loan. The 3 recovery rating indicates 50% to 70% expected default recovery.

S&P also said it assigned a CCC+ rating with a recovery rating of 6 to the company's proposed $280 million secured second-lien term loan. The 6 recovery rating indicates a “negligible” expected default recovery.

The outlook is negative.

The agency said it will withdraw ratings on Optiv Security's previous holding company, AF Borrower LLC and on its debt once this deal closes.

The ratings reflect Optiv's current adjusted leverage of about 8x as of Dec. 31, 2016, including pro forma add-backs for multiple acquisitions in 2016 and proposed acquisitions in early 2017, S&P said.

The agency said it expects adjusted leverage will be less than 7x over the next 12 months.

Optiv Security will continue to benefit from its exposure to the growing security end-market and generate organic growth in the high-single digit percentage or better in fiscal 2017, S&P said.

The ratings also consider the company's good customer diversity and steadily increasing client count and spend, the agency said.

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