S&P gives Luna III BB-

S&P said it gave Luna III Sarl and its planned $1.63 billion term loan due in 2028 preliminary BB- ratings. The loan’s preliminary recovery rating is 3.

Platinum Equity plans to acquire Urbaser SAU from China Tianying. It will use the term loan and €1.11 billion in equity from financial sponsor to buy the company.

“Although Luna is owned by financial sponsor Platinum Equity, we expect Luna will have an adjusted debt to EBITDA just above 5x–the low end of what we typically see for sponsor-owned companies–at the end of 2021, dropping below 5x by year-end 2022,” S&P said in a press release.

The agency said it projects the company delivering continued top line growth, operating margins and free operating cash flow through to new contract wins and moderate cost inflation, favorable industry tailwinds increasing demand for sustainable specialty waste services, and the realization of various process-improvement and cost-reduction initiatives over the next 12-18 months.

The outlook is stable.

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