S&P rates Output facilities B, CCC+

S&P said it assigned its B corporate credit rating to Output Services Group Inc. (OSG Billing). The outlook is stable.

At the same time, the agency assigned its B issue-level rating and 3 recovery rating to the company's $15 million revolving credit facility due 2023, $230 million first-lien term loan due 2024 and $50 million delayed draw term loan due 2024.

The 3 recovery rating indicates an expectation for meaningful recovery (50% to 70%; rounded estimate: 55%) in the event of default.

S&P also assigned a CCC+ issue-level rating and 6 recovery rating to the company's $65 million second-lien term loan due 2025. The 6 recovery rating indicates an expectation for negligible recovery (0% to 10%; rounded estimate: 0%).

“Our ratings reflect the company's narrow business focus as a provider of billing and critical communications as well as customer engagement solutions to the middle market,” the agency said in a news release.

“The rating also incorporates its small scale, geographic concentration and limited breadth in product offerings, along with the company's high pro forma leverage at the time of the transaction.”

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