Research Update: ADMI Corp. 'B' Rating Affirmed, Outlook Remains Negative; Incremental Term Loan Rated 'B' (Recovery Rating: 4)

ADMI Corp. is issuing an $835 million dividend distribution to its shareholders, funded by an incremental $700 million first-lien term loan and $150 million cash on hand. The proposed transaction will also increase revolving credit facility availability to $350 million from $250 million (undrawn at close). The transaction increases adjusted leverage by about 1.5x, to a projected 8.0x at year end 2021. This is only moderately above our previous expectation of 7.6x leverage for 2021, reflecting ADMI's strong operating performance during the past two quarters. We affirmed our 'B' issuer credit rating on ADMI. At the same time, we assigned our 'B' issue-level rating and '4' recovery rating to the proposed $700 million incremental term loan. We revised the existing

...- ADMI Corp. is issuing an $835 million dividend distribution to its shareholders, funded by an incremental $700 million first-lien term loan and $150 million cash on hand. The proposed transaction will also increase revolving credit facility availability to $350 million from $250 million (undrawn at close). - The transaction increases adjusted leverage by about 1.5x, to a projected 8.0x at year end 2021. This is only moderately above our previous expectation of 7.6x leverage for 2021, reflecting ADMI's strong operating performance during the past two quarters. - We affirmed our 'B' issuer credit rating on ADMI. At the same time, we assigned our 'B' issue-level rating and '4' recovery rating to the proposed $700 million incremental term loan. We revised the existing recovery rating on ADMI's other senior secured debt to '4' from '3'. The '4' recovery rating reflects our expectation for average (30%-50%; rounded estimate: 40%) recovery in the event of payment default. - The negative outlook...

Research Update