S&P gives KPEX facilities B, CCC+

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

The outlook is stable.

At the same time, the agency assigned a B issue-level rating to the company's $45 million revolving credit facility due 2023 and $430 million first-lien debt. The recovery rating is 3, indicating an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of payment default.

In addition, S&P assigned a CCC+ issue-level rating to KPEX's second-lien term debt due 2026. The recovery rating is 6, indicating an expectation for negligible (0%-10%; rounded estimate: 0%) recovery.

AEA Investors LP is acquiring a controlling interest in KPEX. A new legal entity, Spectrum Holdings III Corp. is issuing the debt, and will be merged into KPEX upon the consummation of the transaction, following which KPEX will be renamed Spectrum Holdings III Corp.

Pro forma for the transaction, the agency said it estimates adjusted debt to EBITDA will be about 7x for fiscal year ending Dec. 31, 2018, and about 6x for fiscal year ending 2019.

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