Bulletin: Ring Container Technologies Group LLC First-Lien Credit Facilities Ratings Unaffected By Planned $30 Million Upsizing

NEW YORK (S&P Global Ratings) Sept. 29, 2017--S&P Global Ratings said today that its 'B' issue-level rating and '3' recovery rating on U.S.-based Ring Container Technologies Group LLC's proposed senior secured first-lien credit facilities are unaffected by the company's announcement that it plans to upsize the first-lien term loan to $475 million from $445 million originally. The additional $30 million will replace the proposed $30 million delayed draw term loan that we included in our previous analysis (and which we had assumed to be 100% drawn at the time of hypothetical default). The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. All of our other ratings on Ring

...assumptions and inputs remain unchanged. + Our simulated default scenario assumes a payment default in 2020 due to an unexpected decline in profitability and cash flow caused by intense competition from new entrants in the market, increased cost pressures, and client attrition. + We believe that if the borrower were to default there would continue to be a viable business model. Therefore, we chose to value the company on a going-concern basis. Simulated default assumptions + Simulated year of default: 2020 + Revolver draw: 85% Simplified waterfall + Emergence EBITDA: $55.3 million + Multiple: 5.5x + Gross recovery value: $304.2 million + Net recovery value for waterfall after admin. expenses (5%): $289 million + Obligor/nonobligor valuation split: 90%/10% + Estimated first-lien claim: $530 million + --Recovery range: 50-70% (rounded estimate: 50%) + Estimated second-lien claim: $68 million + Estimated secured deficiency claim: $320 million + Value available for second-lien claim: Not applicable...

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