S&P rates Powdr, notes B

S&P said it assigned B ratings to Powdr Corp. and the company’s planned $300 million of second-lien senior secured notes. The agency assigned a 3 recovery rating to the notes.

Powdr also plans to secure an unrated $50 million first-lien senior secured revolver due in 2025.

Proceeds will be used to pay down revolver balances and provide added liquidity against the pandemic and global recession.

“We assigned a B issuer credit rating even though the Covid-19 pandemic and U.S. recession will likely reduce Powdr's revenue and cash flow, potentially raising total gross lease-adjusted debt to EBITDA above our 6x downgrade threshold in fiscal 2020,” S&P said in a press release.

The outlook is negative and reflects the uncertainty of the 2020-2021 ski season and the possibility that if the resort unexpectedly closes for the season, leverage could be sustained above S&P’s 6x downgrade threshold, the agency said.

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