S&P rates Navacord B-, notes CCC

S&P said it assigned Navacord Corp. a B- issuer credit rating and CCC issue and 6 recovery ratings to its planned $300 million in unsecured notes. The 6 rating indicates negligible (0%-10%; rounded estimate: 0%) recovery in default.

“Our rating reflects the company's weak business risk profile and highly leveraged financial risk profile. Established in 2014, Navacord is a Canadian insurance broker with commercial and personal property and casualty (P&C), employee benefits and retirement services, and underwriting services exclusively in Canada,” the agency said in a press release.

S&P noted Navacord’s organic growth for the three-year 2019-2021 period averaged 11%, and the trend has remained consistent in 2022 at about 10% for the year. However, it estimates pro forma S&PGR adjusted debt to EBITDA for Navicord will be at around 8.7x, as of the fiscal year ended Oct. 31.

The outlook is stable.

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