S&P rates Arcis Golf B, facility BB-

S&P said it assigned Arcis Golf LLC a B issuer rating and BB- issue-level and 1 recovery ratings to its planned senior secured credit facilities comprising a $75 million revolving credit facility due in 2026 and a $300 million term loan due in 2028. The 1 recovery rating indicates an expectation for very high (90%-100%; rounded estimate: 95%) recovery for investors in default.

“The B issuer credit rating primarily reflects aggressive anticipated leverage this year, an acquisitive growth strategy that could increase leverage higher than our base case, risks associated with financial-sponsor ownership, and limited geographic diversity. These are somewhat offset by significant financial flexibility of the company's real estate ownership, favorable member income demographics and retention rates, and meaningful barriers to entry in golf,” S&P said in a press release.

Arcis is expected to use the proceeds repay $222 million of debt, to repay a $33 million shareholder loan at a parent subsidiary and for general corporate purposes.

The outlook is stable. “The outlook is stable even though we believe Arcis' acquisitive growth strategy could increase leverage above 5x to purchase new golf assets,” 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.