S&P gives B to Intrawest facility

S&P said it affirmed the B corporate credit rating on Intrawest Resorts Holdings Inc.

The outlook is positive.

The agency also assigned a B issue-level rating to the first-lien debt, with a recovery rating of 3 to be issued by Hawk Merger Sub Inc., the temporary borrower entity in this transaction.

Hawk Merger Sub, an entity controlled by KSL Capital Partners and Henry Crown & Co., plans to raise debt to fund the acquisition of Intrawest Resorts, Squaw Valley Ski Holdings LLC and Mammoth Mountain Ski Area and Snow Summit Ski Co. LLC. It is S&P’s understanding that Hawk Merger Sub will subsequently merge into Intrawest, and the surviving consolidated entity will conduct business as Intrawest.

The first-lien debt consists of a $200 million revolving credit facility due 2022 and a $1.36 billion term loan B due 2024. Of the $1.36 billion term loan B, S&P expects $890 million to be drawn for the acquisition of Intrawest and Squaw, and the remaining $470 million may be drawn on a delayed basis if regulatory approval to acquire Mammoth is temporarily delayed. The recovery rating is 3, indicating an expectation for meaningful recovery (50% to 70%; rounded estimate: 60%) for lenders in the event of a payment default.

"We affirmed the B rating despite the additional debt from the proposed acquisition because we expect total lease-adjusted debt to EBITDA to stay well below our mid-7x downgrade threshold," S&P credit analyst Jing Li said in a news release.

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