S&P rates Celestica loan BB+

S&P said it affirmed its BB long-term corporate credit rating on Celestica Inc.

The outlook is stable.

At the same time, the agency assigned its BB+ issue-level rating and 2 recovery rating to the company's proposed $350 million term loan B due 2025. The 2 recovery rating indicates an expectation of substantial (70%-90%; rounded estimate 75%) recovery in the event of default.

Proceeds from the proposed issuance will be used to refinance Celestica's balance outstanding on the company's $143 million revolving credit facility and $175 million term loan A.

The company is also upsizing its revolver due 2023 to $450 million.

“We expect the refinancing transaction to be leverage neutral, with the company's adjusted debt-to-EBITDA at about 2.2x through 2018,” S&P said in a news release.

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