S&P elevates Gulf Finance, rates loan B

S&P said it raised its issuer credit rating on Gulf Finance LLC to B- from CCC+. The outlook is stable.

At the same time, S&P assigned its B issue-level rating and 2 recovery rating to the company's proposed $723 million term loan B. The 2 recovery rating indicates an expectation of substantial (70%-90%; rounded estimate: 80%) recovery in the event of a payment default.

“The stable outlook reflects our expectation of adjusted debt to EBITDA of 8.8x in 2021, falling to 7.3x in 2022 as the company reduces total leverage year over year through the excess cash flow sweep,” S&P said in a news release.

“Improvements in Gulf's forecast leverage lead us to no longer consider the capital structure to be unsustainable and to view the transaction as eliminating refinancing risk,” the agency said.

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