S&P rates GeoStabilization loan B

S&P said it assigned a B issuer credit rating and B rating with recovery rating of 3 to Geo Parent Corp.'s proposed senior secured credit facility, including its term loan and revolving credit facility.

Geo Parent is the direct parent of Soil-Nail Holdings LLC, which does business as GeoStabilization International.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The outlook is stable.

GeoStabilization is being purchased by affiliates of financial sponsor Kohlberg Kravis Roberts & Co. LP, S&P said.

The transaction will be funded by a proposed $150 million first-lien term loan due 2025 and cash equity, the agency noted.

The transaction will include a proposed $25 million senior secured revolving credit facility due 2023.

Pro forma for the transaction, the company's debt-to-EBITDA ratio will be about 5.1x.

The stable outlook reflects a favorable view of public infrastructure maintenance and repair spending and, to a lesser extent, non-residential construction growth, both representing the majority of the company's end markets, S&P said.

The agency said it projects both to grow in the low- to mid-single digit range over the next two years, the agency said.

The company is expected to sustain a debt-to-EBITDA ratio in the low 5x range, S&P said.

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