Bulletin: Engineered Machinery Holdings Inc.'s Proposed $125 Million First-Lien Term Loan Add-On Increases Leverage Slightly

NEW YORK (S&P Global Ratings) Jan. 25, 2024--S&P Global Ratings today said that equipment manufacturer Engineered Machinery Holdings Inc.'s (doing business as Duravant; B-/Stable/--) proposed $125 million first-lien term loan add-on increases leverage modestly. Duravant plans to use proceeds from the add-on to repay the outstanding drawings under its revolving credit facility as well as provide cash to the balance sheet. In line with its strategy, we believe the company could use the cash for acquisitions over time, providing additional EBITDA that will reduce leverage somewhat (we do not net cash from our adjusted debt calculation for financial sponsor-owned companies). Our ratings on the company, including our 'B-' issue-level rating and '3' recovery rating on the first-lien facilities are unaffected

...January 29, 2024 NEW YORK (S&P Global Ratings) Jan. 25, 2024--S&P Global Ratings today said that equipment manufacturer Engineered Machinery Holdings Inc.'s (doing business as Duravant; B-/Stable/--) proposed $125 million first-lien term loan add-on increases leverage modestly. Duravant plans to use proceeds from the add-on to repay the outstanding drawings under its revolving credit facility as well as provide cash to the balance sheet. In line with its strategy, we believe the company could use the cash for acquisitions over time, providing additional EBITDA that will reduce leverage somewhat (we do not net cash from our adjusted debt calculation for financial sponsor-owned companies). Our ratings on the company, including our 'B-' issue-level rating and '3' recovery rating on the first-lien facilities are unaffected by the proposed transaction. The '3' recovery rating indicates our expectation of meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default....

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