S&P rates Vista Outdoor loans BBB, notes BB+

Standard & Poor’s said it assigned its BB+ corporate credit rating to Vista Outdoor Inc. The outlook is stable.

At the same time, S&P assigned a BBB issue-level rating to the company’s existing $350 million term loan A and $400 million revolver due 2020. The 1 recovery rating indicates an expectation of very high (90% to 100%) recovery in the event of a payment default.

S&P also assigned a BB+ issue-level rating to the company’s proposed $300 million senior unsecured notes due 2023. The 3 recovery rating indicates an expectation of meaningful (50% to 70%) recovery, at the high end of the range, in the event of a payment default.

“The ratings on Vista reflect the company’s moderate debt levels; leading market positions in its product categories; product, brand, and channel diversity; and participation in a growing industry,” said S&P credit analyst Bea Chiem in a news release.

“Offsetting factors include the company’s narrow geographic diversity, with about 80% of sales in the U.S.; participation in a highly competitive and fragmented industry; relatively smaller scale; and majority of sales and profits in the shooting sports segment, which could experience some volatility from gun regulation or publicity.”

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