S&P rates Astro term loans B-, CCC

S&P said it assigned its B- issuer credit rating to Astro Intermediate Holding II Corp. The outlook is stable.

S&P also assigned its B- and CCC issue-level ratings to the proposed first-lien term loan and second-lien term loan, respectively.

The 3 recovery rating on the first-lien term loan indicates an expectation of meaningful (50%-70%; rounded estimate: 55%) recovery for first-lien creditors in the event of a payment default. The 6 recovery rating on the second-lien term loan indicates an expectation of negligible (0%-10%; rounded estimate: 0%) recovery in the event of a payment default.

Financial sponsor Platinum Equity is acquiring Fetch Holdco LLC (parent of Petmate Holdings Co.), and has separately agreed to acquire an unnamed competitor. Platinum plans to merge the two U.S.-based pet suppliers under a newly formed holding company, Astro Intermediate Holding II Corp.

“Our rating reflects Astro's very weak credit metrics, aggressive financial policies, and a deleveraging plan that hinges on successful merger execution. We estimate leverage at transaction close (excluding cost savings and the costs to achieve synergies) will be in the high-8x area,” S&P said in a news release.

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