Bulletin: Sweetwater Borrower's Credit Metrics Will Remain In Line With Expectations Following Term Loan Add-On

This report does not constitute a rating action. BOSTON (S&P Global Ratings) Feb. 12, 2024--S&P Global Ratings today said that it expects credit metrics for Sweetwater Borrower LLC (B/Stable/--) to remain in line with expectations following the company's $90 million fungible add-on to its term loan facility. Our 'B' issue-level rating and '3' recovery rating on its revolving credit facility and term loan are unchanged, reflecting our expectation of meaningful (50%-70%; rounded estimate: 50%) recovery for first-lien debtholders in the event of default. Sweetwater intends to use the term loan add-on proceeds to fund an acquisition. Pro forma for the transaction, we expect S&P Global Ratings-adjusted leverage of about 4.9x. We believe the company will continue to expand its revenue

...February 12, 2024 This report does not constitute a rating action. BOSTON (S&P Global Ratings) Feb. 12, 2024--S&P Global Ratings today said that it expects credit metrics for Sweetwater Borrower LLC (B/Stable/--) to remain in line with expectations following the company's $90 million fungible add-on to its term loan facility. Our 'B' issue-level rating and '3' recovery rating on its revolving credit facility and term loan are unchanged, reflecting our expectation of meaningful (50%-70%; rounded estimate: 50%) recovery for first- lien debtholders in the event of default. Sweetwater intends to use the term loan add-on proceeds to fund an acquisition. Pro forma for the transaction, we expect S&P Global Ratings-adjusted leverage of about 4.9x. We believe the company will continue to expand its revenue and EBITDA base, leading us to forecast leverage improving to 4.4x by the end of 2024, with interest coverage of about 2.9x. For additional information, see our most recent full analysis, published...

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