S&P cuts ABC Financial

S&P said it lowered its issue-level ratings on ABC Financial Intermediate LLC's first-lien credit facility to B- from B and revised the recovery rating to 3 from 2 following the company's proposed $115 million add-on.

The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate 60%) recovery in the event of a payment default.

The incremental loan will be fungible with the existing first-lien debt due 2025. The company intends to use the proceeds to repay its $115 million second-lien facility (unrated).

The B- issuer credit rating and stable outlook on ABC are unaffected.

“We view this transaction as leverage neutral with some cash flow benefits given the reduction in interest expense,” S&P said in a news release.

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