S&P rates Reedy, loans B-

S&P said it gave B- ratings to Thermostat Purchaser III Inc. (Reedy Industries) and planned first-lien credit facilities. The recovery rating is 3.

Reedy plans to secure a $65 million revolver (undrawn at close) due 2026, a $325 million first-lien term loan due 2028 and an unrated $93.5 million second-lien term loan due in 2029.

Reedy is being acquired by Partners Group.

“The company's high starting leverage, financial sponsor ownership, and our expectation for ongoing debt-funded acquisitions will likely prevent significant leverage reduction within the next 12 months. We expect S&P Global Ratings-adjusted pro forma leverage to remain in the low-8x area through 2021,” S&P said in a press release.

The outlook is stable, reflecting a forecast, the agency said, that Reedy's increased scale should enable it to maintain EBITDA margins around 12% and generate free operating cash flow of about $30 million in the next 12-18 months.

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