S&P gives Output Services loan, add-on B

S&P said it affirmed its B issuer credit rating on Output Services Group Inc. The outlook is stable.

The company is proposing a $50 million fungible add-on to its first-lien term loan due 2024 and an additional $50 million delayed-draw term loan to finance its robust acquisition pipeline.

The agency affirmed the B issue-level rating on the company’s senior secured facility and CCC+ issue-level rating on its second-lien term loan.

S&P also assigned a B issue-level rating to the proposed first-lien term loan add-on and additional delayed-draw term loan.

“Our rating affirmation is based on our expectation that Output Service Group will continue to expand its earnings profile, generate moderate free cash flow, and improve its credit metrics over the next year despite a near-term decline related to a series of contracted tuck-in acquisitions,” the agency said in a news release.

“Over the past few years, the company has made substantial investments in its platform and improvements in cost efficiencies to support its aggressive growth strategy. We expect this to translate into improved operating leverage and facilitate enhanced scale going forward.”

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