S&P rates WMB, loan BB-

S&P said it assigned BB- ratings to WMB Holdings Inc. and its planned $2.35 billion first-lien term loan to be borrowed by its subsidiary Corporation Service Co. The recovery rating on the loan is 3, indicating meaningful (50%-70%; rounded estimate: 60%) recovery in default.

In December, CSC reported it planned to acquire Intertrust NV for an equity purchase price of €1.8 billion.

“We assigned our BB- issuer rating to CSC, reflecting its good market position, solid EBITDA margins, consistent revenue growth, and stable profitability, partially offset by its aggressive pro forma adjusted leverage and high business integration needs,” S&P said in a press release.

The agency said it forecasts pro forma adjusted leverage in the high-4x area at close, expected in the second half of 2022. “Thereafter, we expect adjusted leverage to fall to the low-4x area in 2023 and below 4x in 2024.”

The outlook is stable.

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