S&P lowers Redtop facility recovery to 4

S&P said it affirmed its B issue rating on the senior secured term loans due 2020, borrowed by Redtop Acquisitions Ltd. (B/stable/--), an intermediate holding company of CPA Global.

However, the agency revised the recovery rating down to 4 from 3 following the announcement of a proposed £191 million increase in the size of the facility.

S&P will withdraw its CCC+ issue rating on the second-lien debt due 2021, following confirmation that it has been repaid.

The issuance of about £191 million senior secured, first-lien debt will be executed under the existing first-lien debt documentation. As such, the additional debt will be fungible with the existing facilities, and drawn in euros and U.S. dollars.

Redtop intends to use the proceeds, combined with about £23 million in cash, to fully repay its existing second-lien debt, which is due in 2021.

S&P said recovery prospects are in the lower half of the 30%-50% range; supported by the absence of prior-ranking debt in the capital structure, but constrained by a modest security package, the covenant-lite nature of the term loan and the existence of material debt baskets in the documentation.

© 2015 Prospect News.
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