S&P rates KCAR loans B, B-

S&P said it assigned its B corporate credit rating to KCAR Holdco LP. The outlook is stable.

At the same time, S&P assigned its B issue-level rating and 3 recovery rating to the company's $330 million first-lien term loan due 2022 and $65 million revolving credit facility. The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; rounded estimate: 55%) in a default scenario.

S&P also assigned a B- issue-level rating and 5 recovery rating to the company's proposed $120 million second-lien term loan. The 5 recovery rating indicates an expectation for modest recovery (10%-30%; rounded estimate: 15%) in a default scenario.

“Our ratings on KCAR reflect the company's small size, its exposure to the highly cyclical international travel market, the narrow scope of its operations, the low barriers to entry and switching costs in its segment, and the relatively limited diversity of its end markets, customers, and product offerings,” said S&P credit analyst Tatiana Kleiman in a news release.

“These factors are partly offset by the company's solid market position in its niche, its low capital expenditure requirements, its good cash flow generation, and its relatively stable profitability.”

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