S&P gives AMS Intermediate, loans B-

S&P said it gave B- ratings to AMS Intermediate Holdings LLC (All My Sons Moving & Storage) and its planned first-lien loans. The loans’ recovery rating is 3, indicating an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery for creditors in default.

Private equity firm Golden Gate Capital is acquiring the company. It will partially fund the deal with a $290 million senior secured first-lien term loan and a $115 million senior secured second-lien term loan. AMS will also establish a $50 million first-lien revolver that will be undrawn at close.

“The rating reflects our expectation for very high leverage at close and aggressive financial policies under private equity ownership. We estimate leverage at transaction close will be in the mid-8x area and forecast moderate improvement over the next couple of years,” S&P said in a press release.

The outlook is stable, reflecting a forecast for steady organic revenue and profit growth over the next year, the agency said.

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