S&P rates Les Schwab loan B

S&P said it assigned a B rating with 3 recovery rating to the proposed $1.575 billion first-lien term loan B due in 2027 to be issued to Les Schwab (LS Group OpCo Acquisition LLC). The agency also assigned a B rating to the company.

Les Schwab is being acquired by a Meritage Group LC affiliate for about $3.2 billion in a leveraged buyout, funded by a $1.575 billion secured term loan and about $1.7 billion in equity.

The outlook is stable. “The stable outlook reflects our expectation for gradually improving sales trends in 2021 as vehicle miles driven continue to recover, leading to core retail earnings growth and adjusted leverage approaching the mid-6x area,” S&P said in a press release.

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