S&P rates Mitchell Topco first-lien loan B-

S&P said it assigned its B- issuer credit rating on Mitchell Topco Holdings Inc. The outlook is stable.

The B- issue-level rating remains unchanged on Mitchell International's $1.6 billion first-lien credit facilities, which consist of an upsized $125 million revolving credit facility and an upsized $1.503 billion term loan due 2022. S&P expects the revolving credit facility to be undrawn when the transaction closes.

The 3 recovery rating indicates an expectations for meaningful recovery (50%-70%; rounded estimate: 65%) of principal in the event of a payment default.

The CCC issue-level rating remains unchanged on the company's $450 million second-lien term loan due 2024. The 6 recovery rating indicates an expectations for negligible recovery (0%-10%; rounded estimate: 0%) of principal in the event of a payment default.

“The issuer credit rating reflects our view that Mitchell's scale and diversity will improve after the merger with Genex, the company's leadership positions in the fast growing casualty segment, and relatively stable auto physical damage (APD) segment, and our expectation for leverage to remain elevated,” S&P said in a news release.

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