S&P rates AmeriLife, loans B

S&P said it assigned B ratings to AmeriLife Holdings LLC and its proposed five-year first-lien $75 million revolver; $390 million seven-year first-lien term loan; and seven-year first-lien delayed-draw $75 million term loan. The recovery ratings on these issues are 3, reflecting meaningful recovery expectations (50%-70%, rounded estimate: 50%) in the event of a payment default.

S&P also assigned a CCC+ debt rating to the company’s planned $115 million, eight-year, second-lien term loan. The recovery rating on this issue is 6, reflecting negligible expectations for recovery (0%-10%, rounded estimate: 5%).

Thomas H. Lee Partners is acquiring the company. “AmeriLife will issue $505 million in funded debt to effectuate the transaction. We believe the transaction will result in pro forma adjusted leverage of 6.5x-7x as of year-end 2019 (including run-rate adjusted EBITDA of recently completed and pending acquisitions). We expect AmeriLife’s pro forma leverage to remain at 6x-7x in 2020-2021 because we expect AmeriLife to use its delayed draw term loan (along with potential sponsor equity) to fund future acquisitions of small- to midsize assets that will build on its existing business lines,” said S&P in a press release.

The outlook is stable.

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