Heartland Dental LLC's Proposed $870 Million Incremental First-Lien Term Loan Rated 'B-' (Recovery Rating: '3')

TORONTO (S&P Global Ratings) June 10, 2021--S&P Global Ratings today assigned its 'B-' issue-level rating and '3' recovery rating to Heartland Dental LLC's proposed $870 million incremental first-lien term loan. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. The company plans to use the proceeds from this term loan to fund its $660 million acquisition of American Dental and refinance its existing 2019 term loan (totaling about $150 million) at a slightly lower interest rate. We expect Heartland to use the remainder of the proceeds to pay about $20 million of transaction fees and add about $40 million of cash to its balance sheet. This transaction is

...Simplified waterfall - Net enterprise value (after 5% administrative costs): $1,196 million - Collateral value available to secured debt: $1,196 million - First-lien secured debt: $2,341 million - --Recovery expectations: 50%-70% (rounded estimate: 50%) - Collateral value available to senior unsecured debt: $0 - Senior unsecured debt: $323 million - --Recovery expectations: 0%-10% (rounded estimate: 0%) Note: All debt amounts include six months of prepetition interest....

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