Research Update: LSCS Holdings Inc. 'B-' Rating Affirmed, Outlook Stable; First-Lien Debt Rated 'B-', Second-Lien Debt Rated 'CCC'

LSCS Holdings Inc. is launching a recapitalization transaction to refinance its debt and to fund the previously announced $1 billion acquisition of InTouch Group. The new debt consists of a $90 million first-lien revolving credit facility, $690 million first-lien term loan, and $290 million second-lien term loan. Proceeds from debt, along with new equity, will be used to fund the acquisition and to fully repay the company's previous debt. We believe the additional debt leverage is somewhat offset from a credit quality perspective by the increased scale of the business, strong recent operating results, and our expectation that the acquisition will be accretive to free cash flow. We affirmed our 'B-' issuer credit rating on LSCS. We also assigned our

...LSCS Holdings Inc. is launching a recapitalization transaction to refinance its debt and to fund the previously announced $1 billion acquisition of InTouch Group. The new debt consists of a $90 million first-lien revolving credit facility, $690 million first-lien term loan, and $290 million second-lien term loan. Proceeds from debt, along with new equity, will be used to fund the acquisition and to fully repay the company's previous debt. - We believe the additional debt leverage is somewhat offset from a credit quality perspective by the increased scale of the business, strong recent operating results, and our expectation that the acquisition will be accretive to free cash flow. - We affirmed our 'B-' issuer credit rating on LSCS. We also assigned our 'B-' issue-level rating and '3' recovery rating to the proposed first-lien debt and our '###' issue-level rating and '6' recovery rating to the proposed second-lien debt. Our 'B-' and '###' issue-level ratings and '3' and '6' recovery ratings...

Research Update