S&P rates Ontic loans B-, CCC

S&P said it assigned a preliminary B- long-term issuer credit rating to Bleriot Midco Inc. (Ontic). At the same time, S&P assigned a preliminary B- issue rating to the first-lien facilities and preliminary CCC issue rating to the second-lien loan. The recovery ratings on these facilities are 4 and 6, respectively.

The outlook is stable.

Ontic is being acquired by private equity firm CVC from BBA Aviation and raising $1.3 billion of new debt as part of the transaction. This debt will comprise an $85 million revolving credit facility, a $475 million term loan, a $175 million second-lien loan and a $75 million delayed-draw term loan.

“Our preliminary B- rating on Ontic reflects our view that Ontic holds leading niche market positions and exhibits high reported EBITDA margins, but requires the ongoing acquisition of new intellectual property (IP) licenses to materially grow the business. We view the capital structure as very highly leveraged. Ontic is smaller in terms of its scale and revenue and EBITDA base than its rated peers,” S&P said in a news release.

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