S&P rates MetroNet facility B-

S&P said it assigned B- issue-level and 3 recovery ratings to MetroNet Systems Holdings LLC's planned $585 million first-lien term loan B due 2028 and $125 million revolving credit facility due 2026. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in default.

Parent MetroNet Holdings LLC plans to use the proceeds to repay the remaining $485 million balance on its term loan due 2026, add $82 million of cash to the balance sheet to prefund capital expansion and pay fees and expenses.

The new revolving credit facility will replace the $103 million revolver due 2024, which was undrawn on March 31.

“We expect the new first-lien credit facility and proposed new $85 million second-lien term loan due 2029 (unrated), which the company plans to use to repay its existing $85 million second-lien term loan due 2027, to close and fund in May 2021,” S&P said in a press release.

The agency also gave B- issue-level and 3 recovery ratings to MetroNet Systems’ proposed $65 million first-lien delayed-draw term loan due 2028, which are in line with the ratings on the company's new first-lien credit facility.

MetroNet Holdings plans to use the proceeds from its first-lien delayed-draw term loan and planned new $175 million unrated second-lien delayed-draw term loan to distribute to owners in conjunction with Oak Hill's conversion of $260 million of preferred equity to common.

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