Harland Clarke Holdings Corp.'s Proposed Term Loan B-6 Rated 'BB-' (Recovery Rating: '2')

NEW YORK (S&P Global Ratings) Jan. 24, 2017--S&P Global Ratings today assigned its 'BB-' issue-level rating and '2' recovery rating to Harland Clarke Holdings Corp.'s (HCHC's) proposed $370 million senior secured term loan B-6 due February 2022. The '2' recovery rating indicates our expectation for substantial recovery (70%-90%; lower half of the range) of principal in the event of a payment default. The company will use the net proceeds from the proposed financing to extend its debt maturity profile by repaying maturities due in 2018. Our 'B+' corporate credit rating and stable rating outlook on the company are not affected by the proposed transaction. We expect that HCHC's adjusted leverage will remain in the high-4x area in 2016 and then

...NEW YORK (S&P Global Ratings) Jan. 24, 2017--S&P Global Ratings today assigned its '##-' issue-level rating and '2' recovery rating to Harland Clarke Holdings Corp.'s (HCHC's) proposed $370 million senior secured term loan B-6 due February 2022. The '2' recovery rating indicates our expectation for substantial recovery (70%-90%; lower half of the range) of principal in the event of a payment default. The company will use the net proceeds from the proposed financing to extend its debt maturity profile by repaying maturities due in 2018. Our 'B+' corporate credit rating and stable rating outlook on the company are not affected by the proposed transaction. We expect that HCHC's adjusted leverage will remain in the high-4x area in 2016 and then decline to the mid- to high-4x area in 2017 after the company pays roughly $100 million of required principal amortization payments. We continue to expect HCHC to generate good discretionary cash flow and refinance or extend its upcoming debt maturities...

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