S&P rates Crosby loans B-, CCC

S&P said it assigned a B- rating to Lifting Holdings Ltd.’s (Crosby Group) planned $330 million nonfungible first-lien term loan with a 3 recovery rating indicating adequate (50%-70; rounded estimate: 65%) recovery in default. The agency also gave a CCC issue and 6 recovery rating to the planned $50 million nonfungible second-lien term loan. The recovery rating indicates minimal (0%-10; rounded estimate 0%) recovery in default.

Additionally, S&P revised the outlook to positive from stable and affirmed the B- issuer rating.

“Crosby will use the loan proceeds, along with new equity to be contributed by its owner, to fund the acquisition of KITO Corp. and associated transaction fees and expenses; as part of the transaction, the revolver is expected to be upsized by $50 million to $120 million.

“Pro forma for the completion of the acquisition and incorporating a full year of KITO cash flow, we forecast Crosby's S&P Global Ratings-adjusted debt to EBITDA to improve to about 6x at close from the low-8x area as of June 30, 2022, while increasing its scale and diversity due to the acquisition,” S&P said in a press release.

The improved outlook reflects the possibility of an upgrade over the next 12 months if Crosby integrates KITO and the agency sees adjusted leverage staying under 6.5x, the agency said.

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