S&P rates GreenSky facility B+

S&P said it assigned its B+ issue-level rating and 3 recovery rating to GreenSky Holdings LLC’s $75 million tranche B-2 term facility due 2025. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 50%) recovery for lenders in the event of default.

The new debt ranks pari passu with the company’s first-lien secured debt and has substantially the same terms.

The proceeds will be added to GreenSky’s unrestricted cash balance.

The added debt increased GreenSky’s adjusted leverage to about 3.6x from 3x for the 12-months ended March 31, 2020, the agency said.

“While we forecast that the company’s leverage will exceed 7x in 2020, we expect its free operating cash flow (FOCF)-to-debt ratio to remain in our expected range of the mid- to high-teens percent area, which is a key rating consideration,” S&P said in a press release.

The outlook is negative.

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