S&P ups WH, rates add-on B

S&P said it raised WH Intermediate LLC’s (WHP) issuer and debt ratings to B from B- and assigned B and 3 recovery ratings to the company's incremental first-lien term loan.

The agency also removed the ratings from CreditWatch with positive implications where they had been placed on Dec. 9. The outlook is stable.

The review followed WH reporting a planned joint venture with Express Inc. The company plans to fund the deal with an incremental term-loan raise of $150 million, revolver borrowings, WHP's portion of the prepaid Express guaranteed minimum royalty and balance sheet cash. S&P said it views the transaction as leverage neutral with pro forma leverage of about 5.1x at close and hovering around 5x for the next 12 months.

“The stable outlook reflects our belief that WHP will successfully manage its new partnership as credit metrics continue to improve over the next 12 months through incremental EBITDA. We expect leverage to remain above 5x due to its acquisitive growth strategy and the potential for additional debt-funded acquisitions and dividends to the financial-sponsor owners,” the agency said in a press release.

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