S&P upgrades CCM Merger

S&P said it raised the corporate credit rating on CCM Merger Inc. to B+ from B.

The agency also said it raised the rating on the company's senior secured debt, consisting of a $15 million revolver and a term loan with $400 million, to BB from BB-.

The recovery rating on this debt remains at 1, indicating 90% to 100% expected default recovery.

S&P said it also raised the rating on the company's $200 million senior unsecured notes due in 2022 to B+ from B- and revised the recovery rating to 3 from 5.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The outlook is stable.

The improved recovery prospects for unsecured lenders is due to the lower secured debt outstanding in the simulated default scenario because of optional term loan repayment in 2017, S&P said.

The upgrades reflect CCM Merger's accelerated debt reduction compared to expectations, coupled with modest outperformance relative to our base-case operating forecast for 2017, the agency said.

As a result, S&P said it now expects adjusted debt-to-EBITDA ratio to improve to the mid-4x range in 2018 from the mid- to high-4x range at the end of 2017, compared to a previous forecast of the low-5x range at the end of 2017.

The agency said it believes leverage in the mid-4x range provides sufficient flexibility for CCM Merger to withstand modest revenue and EBITDA volatility in the event of economic weakness and remain less than the 5x leverage threshold.

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