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S&P rates Alpha AB loans B
S&P said it assigned its preliminary B long-term issuer credit rating to Alpha AB Bidco BV. The outlook is stable.
Partners Group has acquired the belting producers AI Alabama Midco BV (Ammeraal Beltech) and Megadyne SpA. The company intends to merge the two companies under a new entity, Alpha AB Bidco.
At the same time, the agency assigned a preliminary B issue rating and 3 recovery rating to Alpha's proposed €830 million first-lien term loan. The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; rounded estimate: 60%) in the event of a payment default.
Additionally, S&P said it removed the B long-term issuer credit rating on AI Alabama Midco from CreditWatch, where S&P placed it with negative implications on July 3. The outlook is stable.
S&P also affirmed its B issue rating on AI Alabama's senior secured debt and the CCC+ issue rating on its secured subordinated debt and removed the ratings from CreditWatch, where S&P placed them with negative implications on July 3.
The 3 recovery rating on the senior secured debt and the 6 recovery rating on the subordinated debt both remain unchanged. The 3 recovery rating indicates an expectation for meaningful recovery (50%-70%; rounded estimate: 55%) in the event of a payment default. The 6 recovery rating indicates an expectation for negligible recovery (0%-10%; rounded estimate: 0%) in the event of a payment default.
The preliminary rating on Alpha incorporates S&P’s assumption that the group will issue a seven-year €830 million first-lien term loan and an eight-year $186 million second-lien term loan to finance the acquisitions, pay transaction-related costs, and repay all but €35 million of outstanding debt of the target companies. The first-lien term loan will rank ahead of the €35 million local working capital debt.
The group will also issue a €150 million multicurrency revolving credit facility.
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