S&P rates Asurion loan B+

S&P said it gave a B+ debt rating to the planned $1.184 billion term loan B-10 due 2028 to be issued by Asurion Group Inc. and subsidiaries. The agency also assigned a 3 recovery rating, indicating meaningful recovery (65%) in default. Included in this transaction, the company plans to extend the maturity on its $250 million revolver to 2027.

“We rate the revolver and existing first-lien term loans B+, with a recovery rating of 3 (65%). We also rate the company's second-lien term loans B with a recovery rating of 5, which indicates our expectation for modest recovery (10%) in the event of a default,” S&P said in a press release.

Asurion Group is expected to use the proceeds to refinance the company's maturing $1.719 billion term loan B-6, as well as pay related fees and expenses. The company will also pay down the remaining $600 million in B-6 term loan debt with balance sheet cash.

“This would satisfy the cash flow sweep requirement that would be effective in the first quarter of 2023. We expect this transaction to result in a slight decline in leverage and for pro forma financial leverage as of the 12 months ended June 30, 2022, to be 5.6x with EBITDA interest coverage exceeding 2x,” S&P said.

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