S&P rates BCPE North loans B-, CCC

S&P said it rated BCPE North Star Holdings LP's (Dessert Holdings) $75 million first-lien delayed-draw term loan B- and a CCC rating to the company's $20 million second-lien delayed-draw term loan.

The agency also affirmed the B- issue-level ratings on the $155 million revolving credit facility and $855 million first-lien term loan. The revolver and first-lien term loan recovery ratings remain 3, and the second-lien term loan recovery rating, on its outstanding $250 million second-lien term loan, rated CCC, remains 6.

S&P also revised Dessert Holdings’ outlook to negative from stable and affirmed the B- issuer rating.

“We estimate S&P-Global Ratings adjusted pro forma leverage was about 10x for the 12 months ended Sept. 30, 2022. We expect leverage will remain above 8x through the end of fiscal year 2023. We had previously expected the company to deleverage closer to 7x by the end of 2022. The company reported substantial negative FOCF for the nine-month period ended Sept. 30, 2022. In addition to the operational challenges, this has been also due to large working-capital outflows during the year, to rebuild inventory positions that were depleted due to strong demand in 2021 continuing into 2022,” the agency said in a statement.

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