Standard & Poor's Ratings Services has assigned a B- issue rating to DAE Aviation Holdings proposed $520 million secured term loan due 2018.
The rating agency has also assigned a '3' recovery rating to the loan, indicating that it expect lenders to receive a meaningful (50%-70%) recovery in the event of payment default. S&P has also affirmed its 'CCC' issue rating and '6' recovery rating on the company's unsecured notes.
The company also plans to enter into a new $150 million asset-based loan (ABL) revolving credit facility due 2017 (not rated), that will replace the existing $100 million revolver ($65 million outstanding as of June 30, 2012) due 2013. The company will use the proceeds from the new term loan to refinance the existing $470 million term loan due 2014, pay related fees and expenses, and provide additional cash liquidity.
Both the revolver and term loan will be due six months before the August 2015 maturity of the company's unsecured notes, if the notes are not refinanced before that date. If the refinancing is completed on terms substantially similar to those presented, S&P expects to affirm the corporate credit rating and revise the outlook to stable from negative.
DAE Aviation loan rated B-
