Research Update: Apple Bidco LLC (Atlantic Aviation) Issuer Credit Rating Affirmed, Outlook Stable; First-Lien Debt Rating Lowered

Apple Bidco LLC (Atlantic Aviation), a provider of fuel, terminal, aircraft hangaring, and other aviation services, will issue a $750 million incremental first-lien term loan to repay its $350 million second-lien term loan and fund a $385 million dividend to shareholders. S&P Global Ratings' pro forma adjusted leverage will increase to 6.7x from 5.8x as of Dec. 31, 2022. We forecast it will remain in the mid-6x area, well below our mid-7x downgrade threshold for the rating, over the next 12 months. Therefore, we affirmed our 'B' issuer credit rating on Atlantic. At the same time, we lowered our issue-level rating and revised the recovery rating on the first-lien credit facility to 'B' and '3', respectively, due to lower recovery

...- Apple Bidco LLC (Atlantic Aviation), a provider of fuel, terminal, aircraft hangaring, and other aviation services, will issue a $750 million incremental first-lien term loan to repay its $350 million second-lien term loan and fund a $385 million dividend to shareholders. - S&P Global Ratings' pro forma adjusted leverage will increase to 6.7x from 5.8x as of Dec. 31, 2022. We forecast it will remain in the mid-6x area, well below our mid-7x downgrade threshold for the rating, over the next 12 months. - Therefore, we affirmed our 'B' issuer credit rating on Atlantic. - At the same time, we lowered our issue-level rating and revised the recovery rating on the first-lien credit facility to 'B' and '3', respectively, due to lower recovery prospects for first-lien lenders given the increase in first-lien debt. - The stable outlook reflects our expectation that Atlantic will sustain S&P Global Ratings' pro forma adjusted leverage in the mid-6x area with ample liquidity to fund increased capital...

Research Update