S&P rates LABL loans B

S&P said it gave a B issue-level rating and 3 recovery ratings to LABL Inc.'s planned senior secured $632 million term loan and €500 million term loan, both due July 1, 2026. The 3 recovery rating indicates expectations for meaningful (50%-70%; rounded estimate: 55%) recovery in default.

LABL is issuing the debt via an amendment to its July 1, 2019, credit agreement, and the proceeds will be used to redeem term loans fully.

“With the applicable margins on its term loans reduced at least 50 basis points pro forma for the refinancing, we believe the company may save almost $8 million in annual interest expense. We expect the transaction to be leverage-neutral and for the company to continue to improve upon its highly leveraged capital structure,” the agency said in a press release.

S&P’s other LABL ratings are unchanged, the agency said.

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