S&P gives B- to Avalign first-lien debt

S&P said it assigned a B- issuer credit rating to Avalign Holdings Inc.

At the same time, S&P assigned a B- issue-level rating and 3 recovery rating to the company's first-lien debt. At the issuer's request, S&P said it is not rating the second-lien debt.

The outlook is stable, reflecting an expectation that even with strong revenue growth, improving margins, and moderate cash flow generation, Avalign's funded leverage will likely remain above 7x because S&P expects the company's financial sponsor to prioritize shareholder returns over permanent debt reduction.

Linden Capital Partners is acquiring Avalign Holdings. The company's pro forma capital structure will include a $35 million five-year revolving credit facility, undrawn at close, a $200 million seven-year senior secured first-lien term loan and a $90 million eight-year senior secured second-lien term loan.

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