S&P revises Casablanca Global recovery rating

S&P said it revised the recovery rating for Casablanca Global Intermediate Holdings LP’s (Apple Leisure Group) senior secured credit facilities to 4 from 3.

The revision reflects diminished recovery prospects for lenders after the company issued $200 million senior secured notes due 2025 through an affiliate, S&P said. The issuer, Casablanca Holdings LP, issued the notes to the company’s financial sponsors. The notes rank equally with the first-lien revolver and term loan facilities.

“The CCC+ issue-level rating on the senior secured revolver and term loan facilities is unchanged despite lowered recovery prospects for lenders. The CCC+ issuer rating on the company is also unchanged because we believe the incremental liquidity probably is adequate over the next 12 months,” S&P said in a press release.

S&P said Apple Leisure plans to issue $50 million of added notes to term loan lenders on or before Sept. 10. “We also understand that if term loan lenders fail to purchase the notes offered, the sponsors will purchase them. Furthermore, ALG will have the option to issue $65 million of additional notes through March 10, 2023, contingent on meeting certain minimum liquidity requirements,” S&P said.

Proceeds will be used for general corporate purposes. At the same time as the notes offering, Apple Leisure extended the maturity of its revolver to Dec. 31, 2023.

The outlook is negative.

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