S&P rates Astra, loan B-

S&P said it assigned B- ratings to Astra Acquisition Corp. and its proposed $40 million revolver expiring 2025 and $325 first-lien term loan due 2027, and a CCC issue-level rating its proposed $110 million second-lien term loan due 2028. S&P assigned a recovery rating of 3 to the revolver and first-lien loan and a 6 recovery rating to the second-lien loan.

Proceeds and cash equity from Veritas Capital and Leeds Equity will be used to acquire Campus Management Corp. and Edcentric.

“Our rating reflects Astra's substantial financial leverage, narrow end-market focus within the higher education software market, potential disruption from integration of Campus Management and Edcentric, and competition from larger established players. We estimate Astra's pro forma leverage at 13.4x as of Dec. 31, 2019, which we expect will improve to the mid-11x area by the end of 2020 on organic revenue growth and margin expansion,” said S&P in a press release.

The outlook is stable.

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