S&P rates Avatar Holdco, facilities

S&P said it assigned its B corporate credit rating to Avatar Holdco LLC (also known as EAB) and assigned a B issue-level rating to the company's proposed $610 million senior secured first-lien facilities, which consist of a $70 million revolving credit facility and a $540 million term loan.

The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 55%) recovery of principal in the event of a payment default. The borrower of the credit facilities is Avatar Purchaser Inc.

The outlook is stable.

“Our corporate credit rating on EAB reflects the company's limited geographic diversification, small size, and narrow product focus, high forecasted leverage in the mid-11x area, and financial sponsor ownership,” the agency said in a news release.

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