S&P rates Berlin Packaging loans B+, CCC+

Standard & Poor's said it assigned a B corporate credit rating to Berlin Packaging LLC, along with a B+ rating and 2 recovery rating to its proposed $40 million revolving credit facility due 2018 and $385 million first-lien term loan B due 2019.

The 2 recovery rating indicates 70% to 90% expected default recovery.

The agency also said it assigned a CCC+ rating and 6 recovery rating to Berlin's proposed $175 million second-lien term loan due 2020. The 6 recovery rating indicates 0% to 10% expected default recovery.

The outlook is stable.

The proceeds from the proposed $385 million first-lien term loan B facility and the $175 million second-lien term loan, as well as about $27 million in cash, will be used to fund a $380 million dividend to its shareholders and repay existing debt, S&P said.

After the completion of the transaction, the agency said it expects total leverage will be about 6.9x, the agency said.

The ratings reflect the company's weak business risk profile and highly leveraged financial risk profile, S&P said.

The business risk profile largely reflects the company's narrow business focus as a distributor of mainly rigid plastic containers in the United States, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.