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S&P rates Lummus, loans B+, notes B-
S&P said it assigned B+ ratings to Illuminate Holdings III LLC, its subsidiary Illuminate Buyer LLC (together doing business as Lummus Technology) and its proposed senior secured debt.
Illuminate Buyer will issue senior secured debt consisting of a $175 million revolving credit facility, a $150 million letter-of-credit facility and about a $1 billion term loan. S&P assigned a 3 recovery rating indicating an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery of principal in the event of a default.
Also, S&P assigned B- and 6 recovery ratings to the about $460 million of unsecured debt to be issued at Illuminate Buyer. The 6 rating indicates an expectation for negligible (0%-10%;point estimate 5%) recovery in the event of a default.
Proceeds will fund the acquisition of the companies by financial sponsors the Chatterjee Group and Rhone Group.
“We view the company’s highly leveraged financial position, including total debt to EBITDA of around 7x on a weighted average basis over the next two years, and its private equity ownership as key financial risks,” S&P said in a press release.
The outlook is stable.
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