S&P rates Vectra B-, facilities B-, CCC

S&P said it assigned its B- corporate credit rating to Vectra Co.

The outlook is stable.

At the same time, the agency assigned its B- issue-level rating and 3 recovery rating to the company's proposed $50 million revolving credit facility due 2023 and its proposed $405 million first-lien term loan due 2025. The 3 recovery rating indicates an expectation for meaningful (50%-70%, rounded estimate 55%) recovery in the event of a payment default.

In addition, S&P assigned its CCC issue-level rating and 6 recovery rating to the company's proposed $160 million second-lien term loan due 2026. The 6 recovery rating indicates an expectation for negligible (0%-10%, rounded estimate 0%) recovery.

The agency said the corporate credit rating primarily reflects the company's high debt leverage, niche product focus and small scale, and financial sponsor ownership.

These risks are partially offset by the company's good market position across its end-markets, long-standing customer relationships and an expectation for the company to generate good free cash flow over the next 12-18 months, S&P added.

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