S&P rates Polystorm loans B

S&P said it assigned preliminary B ratings to Polystorm BidCo AB (Polygon) and proposed first-lien debt (including a delayed-draw facility and revolving credit facility), with a recovery rating of 3, indicating an expectation of meaningful recovery (50%-70%; rounded estimate 60%) in the event of a default.

The outlook is stable.

AEA Investors and several co-investors are acquiring Polygon via a new entity, Polystorm BidCo, funded by a €430 million first-lien term loan, a €120 million second-lien term loan and an equity contribution of around €554 million.

As part of the new capital structure, the group has also contracted a €55 million delayed-draw first-lien term loan and a €90 million revolving credit facility.

“The stable outlook reflects our view that Polygon's revenue and EBITDA will increase via bolt-on acquisitions and solid organic growth of 6%-7%, which should support deleveraging toward 6.5x in 2022, while the company generates around €40 million of adjusted free operating cash flow (FOCF) annually,” S&P said in a news release.

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