S&P rates Octave facility B

S&P said it assigned its B issue-level rating and 3 recovery rating to the Octave Music Group Inc.'s proposed $315 million senior secured credit facility. The 3 recovery rating indicates the expectation of meaningful (50%-70%; rounded estimate: 55%) recovery of principal in the event of a payment default.

Octave's proposed senior secured credit facility comprises an undrawn $25 million revolver and $290 million term loan. The company plans to use the proceeds alongside available cash to refinance its capital structure comprising an undrawn $25 million revolver, the outstanding $231 million of the first-lien term loan and the $67.5 million second-lien term loan.

“While this transaction extends the company's maturity profile, we believe this refinancing will lower the recovery prospects for the remaining single-debt tranche relative to our estimated enterprise value in a hypothetical default scenario, resulting in a lower issue-level rating of B,” said S&P in a press release.

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