S&P assigns B+ to Windsor, loans

S&P said it assigned a B+ issuer credit rating to Windsor Holdings III LLC and its B+ issue-level rating on the secured debt with a stable outlook.

Windsor is issuing the debt for its leveraged buyout of Univar Solutions Inc., rated BB+. Windsor is sponsored by Apollo Global Management Inc. The deal is expected to close in the third quarter of 2023.

“The new owners are contributing roughly $3.8 billion in equity, which is considerable. However, the debt portion of the financing package will likely be more substantial, with $500 million of drawn borrowings under the unrated $1.4 billion asset-based lending (ABL) facility due 2028; $1.75 billion U.S. dollar-denominated senior secured term loan B and $550 million equivalent in Euro-denominated senior secured term loan B tranches both due 2030; and our estimate of $1.8 billion of incremental secured debt to be issued later.

“We project that the additional debt incurred from the transaction will double Univar's S&P Global Ratings-adjusted debt to over $5 billion as of March 31, 2023, compared with less than $2.5 billion at Dec. 31, 2022. Our adjusted debt figure includes over $500 million of debt-like obligations pertaining to operating and financial leases, postretirement obligations, and environmental liabilities,” S&P said in a statement.

The agency said it plans to resolve the negative watch on Univar and withdraw or discontinue its issuer credit rating ratings on the previous secured and unsecured debt issues.

“The stable outlook reflects our view that Univar's good operational execution, synergy realization, and appropriate financial policies will allow it to maintain appropriate credit measures for the ratings despite potentially tepid global macroeconomic conditions in the next year,” S&P said.

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