S&P rates Leaf Home, loans B

S&P said it gave B ratings to LHS Borrower LLC (Leaf Home) and its planned $200 million revolver and $1.41 billion first-lien term loan. The recovery rating on the loans is 3, indicating an expectation for meaningful recovery (50-70%; rounded estimate: 55%) in default.

“S&P Global Ratings expects solid demand in the remodeling market to support EBITDA growth of approximately 15% over the next 12 months to support leverage in the low- to mid-4x range in 2022 from pro forma leverage of 5x for the 12 months ended Sept. 30, 2021,” the agency said in a press release.

S&P said it forecasts revenue growth of more than 20% in 2022 due to expansion into new markets, new service offerings and new marketing channels with its expanding customer base.

The outlook is stable.

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