S&P assigns Sovos B-

S&P said it assigned B- ratings to Sovos Compliance LLC and its planned first-lien debt. The recovery rating on the loans is 3.

Sovos is issuing a $100 million revolving credit facility due 2026, a $1.245 billion first-lien term loan due 2028, a $215 million delayed draw term loan, undrawn at close, with a seven-year maturity/two-year expiration, to fund future acquisitions and $425 million of preferred equity to refinance existing debt, pay a dividend to shareholders, fund an acquisition and pay related fees and expenses.

“The proposed transaction will result in S&P Global Ratings-adjusted leverage (which includes the preferred equity representing 2.7x) decreasing to 10.7x in fiscal 2022 (fiscal year-end June 30) from 18.1x in 2021 (burdened by leveraged buyout (LBO)-related costs). Excluding the preferred equity, S&P Global Ratings-adjusted leverage would be 8x,” S&P said in a press release.

The outlook reflects the forecast that the company's strong recurring revenue base and solid margins will support stable operating growth and help lower leverage into the mid-to-high-10x area by the end of fiscal 2022, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.