S&P gives Heartland loan, notes B-

S&P said it gave B- issue-level and 3 recovery ratings to Heartland Dental LLC's planned amend-and-extend first-lien term loan for about $1.87 billion and $500 million of senior secured notes. The 3 recovery rating indicates meaningful (50%-70%; rounded estimate: 50%) recovery in default.

Heartland wants to extend the loan by three years to April 30, 2028. It plans to use the proceeds from the notes to to partially refinance its debt and for general corporate purposes. Heartland Dental's sponsors, KKR and Ontario Teachers' Pension Plan, will also add about $200 million of new cash equity to support this transaction.

“We expect the majority of the terms under the new term loan credit agreement will be consistent with the existing terms, albeit with a higher margin over the benchmark rate. We will withdraw our ratings on the company's existing first-lien term loans following the close of the transaction. All of our other ratings, including our B- issuer credit rating and stable outlook on Heartland, are unchanged,” S&P said in a press release.

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