S&P alters Mega loan recovery rating

S&P said it affirmed the B+ issue-level rating but lowered the recovery rating on Mega Broadband Investments Intermediate I LLC's (Vyve Broadband) senior secured first-lien debt after the company reported its planned $155 million add-on to its $650 million term loan due 2027.

The agency revised the recovery rating on the company's secured debt to 4 from 3. The 4 recovery rating indicates an estimate of average (30%-50%; rounded estimate: 45%) recovery in default. A 3 rating indicates an estimate of 50%-70% recovery in default. “The lower recovery rating reflects the higher amount of secured debt, which reduces recovery prospects for existing first-lien lenders,” S&P said in a press release.

The company is expected to use the add-on proceeds to fund a $150 million dividend to its shareholders and pay down $5 million outstanding under the revolving credit facility.,”

The B+ issuer credit rating and stable outlook are unchanged, the agency said.

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