S&P rates Wrench $150 million loan B-

S&P said it assigned its B- issue-level rating and 3 recovery rating to Wrench Group LLC's planned $150 million non-fungible incremental first-lien term loan due April 2026, which will rank pari passu with existing first-lien debt. The recovery rating indicates meaningful (50%-70%; rounded estimate: 50%) recovery in default.

“All of our existing ratings on the company, including our B- issuer credit rating, are unchanged,” the agency said in a press release.

The company will use the loan for general corporate purposes, including funding future acquisitions and paying transaction-related expenses. Wrench also is extending the maturity of its $75 million revolving credit facility to April 2025 from April 2024. “The maturity extension mitigates our previous refinancing concerns because the revolver was scheduled to become current in April 2023. Total debt outstanding pro forma for this transaction is $1.107 billion,” S&P said in.

“Pro forma for this transaction, we estimate S&P Global Ratings-adjusted leverage will increase to 7.2x from 6.6x,” the agency noted.

The outlook is stable.

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