S&P rates Encino Acquisition notes B-

S&P said it assigned its B- issue-level rating and 4 recovery rating (rounded estimate: 40%) to Encino Acquisition Partners Holdings LLC's (a wholly owned subsidiary of Encino Acquisition Partners LLC) proposed senior notes due 2031.

S&P also lowered the rating on the company’s existing notes due 2028 to B- from B and revised the recovery rating on the notes to 4 from 2. The 4 recovery rating indicates an expectation for average (30%-50%; rounded estimate: 40%) recovery in the event of a payment default.

Encino intends to use the proceeds from the $500 million notes to repay a portion of the outstanding borrowings under its reserved-based lending credit facility, which had $633 million drawn as of Dec. 31, 2023.

“The downgrade reflects a reduction in our valuation of the company based on lower PV-10 values, which we attribute to lower pricing differentials, as well as the additional proposed debt in the capital structure under our recovery assumptions,” S&P said in a news release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.