S&P: Sage Product unchanged after add-on

Standard & Poor’s said the B rating and 3 recovery rating on Sage Product Holdings III LLC’s $576 million outstanding term loan due 2019 and $60 million revolver are unchanged following the company’s $25 million add-on to the first-lien term loan.

The 3 recovery rating on the first-lien debt indicates 50% to 70% expected default recovery.

The transaction is leverage neutral as the company plans to use the proceeds to reduce the outstanding second-lien debt.

The corporate credit rating of B is unchanged, as is the rating of CCC+ and recovery rating of 6 on the second-lien debt.

The recovery rating of 6 indicates 0 to 10% expected default recovery.

The ratings reflect the company’s weak business risk and highly leveraged financial risk, the agency said.

The ratings also consider the company’s limited size, narrow focus on medical products that help prevent hospital-acquired conditions, limited barriers to entry and the highly competitive nature of the medical product industry, S&P said.

These weaknesses are partially offset by the company’s leading market position across all of its niche product lines and a diversified product mix, the agency said.

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