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S&P rates Casablanca loans B, CCC+
S&P said it assigned a B corporate credit rating to Casablanca International Holdings Ltd., also known as Apple Leisure Group.
The outlook is negative.
The agency also said it assigned a B rating and 3 recovery rating to the company's proposed $125 million senior secured revolving credit facility due in 2022 and $600 million first-lien term loan due in 2024.
This debt will be issued by co-borrowers Casablanca US Holdings Inc. and Casablanca Foreign Holdings Ltd.
The 3 recovery rating indicates 50% to 70% expected default recovery.
S&P also said it assigned a CCC+ rating and 6 recovery rating to the company's proposed $225 million second-lien term loan due in 2025, also to be issued by co-borrowers Casablanca US Holdings and Casablanca Foreign Holdings. The 6 recovery rating indicates 0 to 10% expected default recovery.
The proceeds will be used to finance its acquisition by KKR and KSL Capital Partners.
KKR and KSL entered into an agreement to purchase the assets of ALG Intermediate Holdings BV and its subsidiaries from Bain Capital LLC, S&P explained, creating the new entities under the Casablanca name.
S&P said it plans to withdraw all of the ratings on ALG Intermediate Holdings and its subsidiaries upon completion of the transaction and repayment its debt.
The B corporate credit rating on Apple Leisure primarily reflects sufficient leverage capacity to accommodate the leveraging impact of the proposed financing, despite the large amount of debt being raised to fund the leveraged buyout of the company, the agency said.
The rating also is modestly supported by the planned inclusion of positive cash flow generated by the company's Unlimited Vacation Club subsidiary to the credit group, S&P said.
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