S&P rates DexKo loans B

S&P said it affirmed the B corporate credit rating on DexKo Global Inc. and assigned a B issue-level rating to the company's proposed incremental first-lien term loans comprising a $30 million tranche and a €20 million tranche, and delayed draw first-lien term loans comprising a $50 million tranche and a €90 million tranche.

The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; rounded estimate: 55% for the $30 million and $50 million tranches and 65% for the €20 million and €90 million tranches) in the event of a default.

Additionally, S&P affirmed the B issue-level rating on the company's existing revolving credit facility and first-lien term loans. The 3 recovery rating remains, indicating an expectation for meaningful recovery (50%-70%; rounded estimate: 65% for the $150 million revolving credit facility and €100 million first-lien loan and 55% for all of the other first-lien loans).

The agency also affirmed the CCC+ issue-level rating on the company's $250 million second-lien term loan. The 6 recovery rating remains, indicating an expectation for negligible recovery (0%-10%; rounded estimate: 0%).

The outlook is stable.

The company plans to use the proceeds from the term loans for future acquisitions and to pay back the borrowings on its revolving credit facility.

“We view these acquisitions as consistent with the company's growth strategy of expanding its product offerings into new but related components and solidifying its presence in the North American and European markets,” S&P said in a news release.

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