S&P rates ASP Unifrax loans B-, CCC+

S&P said it assigned its B- issuer credit rating to ASP Unifrax Holdings Inc. The outlook is stable.

S&P also assigned a B- issue-level and 3 recovery ratings to the proposed $1.025 billion first-lien credit facilities, which comprise a $125 million revolver due in 2023 and $900 million in term loans due 2025. The first-lien term loan consists of a $550 million U.S. dollar-denominated tranche and a euro-denominated tranche equivalent to US$350 million.

The 3 recovery rating on the first-lien term loan indicates an expectation for meaningful recovery (50%-70%; rounded estimate: 50%) for lenders in the event of a payment default.

S&P assigned a CCC+ issue-level and 5 recovery ratings to the proposed $300 million second-lien term loan due in 2026. The 5 recovery rating indicates an expectation for modest recovery (10%-30%; rounded estimate: 10%) for lenders in the event of a payment default.

“Our B- issuer credit rating reflects Unifrax's high leverage of about 8x at the end of 2018, which we expect will improve but remain above 6.5x through 2019. We also forecast that the company will not generate meaningful free cash flow over this period due to sizable growth capital expenditures (capex),” S&P said in a news release.

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