S&P rates Paragon Films loans B-, CCC

S&P said it assigned Secure Acquisition Inc. (Paragon Films) planned first-lien secured credit facility B- issue and 3 recovery ratings. The agency also gave CCC issue and 6 recovery ratings to the company’s upcoming second-lien term loan. Concurrently, S&P gave Paragon a B- issuer rating.

“Our assessment reflects Paragon's limited scale and product breadth, small addressable market and competitive landscape, customer concentration and elevated pro forma credit metrics, somewhat offset by favorable macro and secular growth trends and its niche position in ultra-high performance and high performance value-add flexible films,” S&P said in a press release.

Paragon agreed to be acquired by the Rhone Group. The deal will be partially funded with a first-lien senior secured credit facility, comprising an undrawn $45 million revolving credit facility, a $300 million first-lien term loan, and an undrawn $45 million delayed-draw first-lien term loan, and a $100 million second-lien term loan.

The outlook is stable, reflecting an expectation that demand growth will support the company's positive free cash flows and debt leverage above 7x over the next 12 months, S&P said.

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