S&P ups Workflow first-lien loans recovery rating to 2

Standard & Poor's said it raised the recovery rating on Workflow Management Inc.'s first-lien credit facilities to 2 from 3, indicating expectations for a substantial recovery (80%-100%) of principal in the event of a payment default. S&P also affirmed the company's BB- corporate credit rating, BB- senior secured first-lien debt and B senior secured second-lien debt with a recovery rating of 5.

The outlook is negative.

The higher first-lien recovery rating reflects lower pro forma first-lien debt levels because of the planned sale of Workflow's Relizon Canada unit to DATA Group Income Fund for about C$141 million, the agency said, and the reduced first-lien borrowings result in improved recovery prospects for this debt. The purchase price consists of C$112 million in cash and about 3 million units of the fund. The transaction is expected to close during this 2006 third quarter, and proceeds will be used to repay borrowings under the first-lien credit facilities.

S&P said the ratings on Workflow reflect the company's heavy debt levels, moderate-size cash flow base and competitive operating climate.

These factors are tempered by Workflow's solid market position in the niche print management segment and its adequate liquidity, the agency said.

© 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.