Research Update: American Rock Salt Co. LLC Upgraded To 'CCC+' From 'SD' On Improved Liquidity; New Debt Rated; Outlook Negative

American Rock Salt Co. LLC's liquidity position improved following the issuance of new credit facilities consisting of a $50 million first-out term loan (fully drawn at transaction close) and a $60 million first-out delayed-draw term loan (undrawn). We expect earnings and credit metrics will improve assuming normal winter weather and favorable tender results for the 2024-2025 season. However, we believe American Rock Salt is dependent upon favorable business conditions to meet its financial obligations. As a result, we raised our issuer credit rating on the company to 'CCC+' from 'SD'. We also assigned our 'B' issue-level and '1' recovery rating to the new first-out debt. At the same time, we raised our issue-level rating on the first-lien debt to 'CCC'

...- American Rock Salt Co. LLC's liquidity position improved following the issuance of new credit facilities consisting of a $50 million first-out term loan (fully drawn at transaction close) and a $60 million first-out delayed-draw term loan (undrawn). - We expect earnings and credit metrics will improve assuming normal winter weather and favorable tender results for the 2024-2025 season. However, we believe American Rock Salt is dependent upon favorable business conditions to meet its financial obligations. - As a result, we raised our issuer credit rating on the company to '###+' from '##'. - We also assigned our 'B' issue-level and '1' recovery rating to the new first-out debt. At the same time, we raised our issue-level rating on the first-lien debt to '###' from 'D' and revised the recovery rating to '5'. We also raised our issue-level rating on the second-lien debt to '###-' from 'C'. The '6' recovery rating is unchanged. - The negative outlook reflects the increasing downside risk...

Research Update