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S&P: Al Mistral loans B, CCC+
S&P said it assigned a preliminary B long-term corporate credit rating to AI Mistral Holdco Ltd. and AI Mistral (Luxembourg) Subco Sarl.
The agency also said it assigned a preliminary B rating and 3 recovery rating to AI Mistral (Luxembourg) Subco's proposed secured first-lien bank term loans and a preliminary CCC+ rating and 6 recovery rating to its proposed secured second-lien term loan.
The 3 recovery rating indicates 50% to 70% expected default recovery. The 6 recovery rating indicates 0 to 10% expected default recovery.
The outlook is stable.
AI Mistral is the acquisition entity for V. Group, which has received an offer to be acquired by a private equity firm Advent International, S&P explained.
To finance the acquisition, it plans to issue $775 million of senior secured credit facilities via its finance subsidiary AI Mistral (Luxembourg) Subco.
The company will draw down a $495 million senior secured first-lien term loan and $192.5 million secured second-lien term loan to fund the acquisition, with a $57.5 million revolving credit facility and $30 million acquisition facility available when the acquisition closes, S&P said.
V. Group holds leading market positions in the niche sector of integrated marine services, has a large diversified portfolio of vessels under fixed-price service contracts and generates fairly resilient profitability, the agency said.
The ratings also consider V. Group's historically high customer retention rate, strong strategic relationships with recruitment sources, broad service range and sustained reliable execution, which is expected to continue to shield it against the cyclicality of the shipping industry, S&P said.
The ratings also reflect the company’s exposure to contract renewal and volume risks, the agency added.
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