S&P gives Alpine U.S. Bidco B-

S&P said it assigned B- ratings to Alpine U.S. Bidco LLC and its proposed first-lien credit facilities and 2 recovery rating, indicating an expectation for substantial (70%-90%, rounded estimate 75%) recovery in default. Alpine also plans to obtain a second-lien term loan, which the agency rated CCC+ with a 5 recovery rating, indicating an expectation for modest (10%-30%, rounded estimate 10%) recovery in default.

Private equity firm Lindsay Goldberg will use Alpine to acquire Aryzta North America, or ANA, from parent company, Aryzta AG for about $850 million.

Alpine will obtain a $325 million first-lien term loan due 2028, a $100 million revolver due 2026, to be undrawn at close, and a $125 million second-lien term loan along with $404 million of common equity to fund the acquisition.

“The ratings reflect ANA's limited track record of improved operating performance. Aryzta AG is spinning off ANA and we based the ratings on preliminary terms and unaudited carve-out financials (our analysis is subject to review of final documentation). ANA's revenues and profitability have declined for the past several years. Its revenues dropped to about $1.4 billion for the year-ended July 31, 2019, from about $2 billion for the fiscal-year-ended July 31, 2016,” S&P said in a press release.

The outlook is positive, reflecting a possible upgrade if ANA produces steady profit and cash flow improvements, the agency said.

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