S&P rates Vertiv Group notes B

S&P said it assigned a B- rating and 5 recovery rating to Vertiv Group Corp.'s $120 million senior secured second-lien notes due 2024.

The 5 recovery rating indicates 10% to 30% expected default recovery.

The agency said it expects the transaction to be leverage neutral because the company plans to use the proceeds from the proposed debt to repay borrowings under its unrated $455 million asset-based lending revolver.

The B rating and 3 recovery rating on Vertiv's senior secured first-lien term loan due November 2023 is unchanged. The 3 recovery rating indicates 50% to 70% expected default recovery.

The B- rating and 5 recovery rating on the company's $750 million senior unsecured notes due October 2024 also are unchanged. The 5 recovery rating indicates 10% to 30% expected default recovery.

S&P also said the CCC+ rating and 6 recovery rating on holding company Vertiv Intermediate Holding Corp.'s $500 million payment-in-kind (PIK) toggle notes due February 2022 are unchanged.

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

All of the other ratings on Vertiv Group also are unchanged.

The negative outlook reflects the company's high debt leverage and the still in-progress status of its various operational initiatives to foster growth and profitability, S&P said.

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