S&P: Carestream Dental loans B

S&P said it assigned a B corporate credit rating to Carestream Dental Parent Ltd.

The outlook is stable.

S&P also said it assigned a B rating to subsidiary Carestream Dental Equipment Inc.'s first-lien secured debt, which consists of an $80 million revolver and $375 million term loan.

The recovery rating on this debt is 3, indicating 50% to 70% expected default recovery.

Subsidiary Elapid Merger Sub. Inc., which will be renamed Practiceworks Inc. upon transaction close, is a co-borrower on the $80 million revolver.

Carestream Dental operates in two segments. The digital dental imaging equipment business generated 74% of revenue in 2016, the agency said, and consists of various 2D and 3D X-ray and other imaging equipment for use by dental professionals.

The stable outlook on Carestream reflects an expectation that despite positive EBITDA growth and steady cash flow generation, the company's adjusted debt leverage will remain at higher than 5x over the next 12 months given the company's scale and financial sponsor ownership, S&P said.

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