Research Update: Mad Engine Global LLC Assigned 'B' Issuer Credit Rating; Outlook Stable; Debt Rated

U.S.-based designer, producer, and distributor of licensed, branded, and private-label apparel and accessories Mad Engine Global LLC is acquiring Fifth Sun Holdings, a designer and distributor of licensed products in the print-on-demand and direct-to-garment markets. A combination of equity and debt will finance the transaction, including a new $75 million asset-based lending (ABL) revolving credit facility due in 2026 (not rated) and $250 million senior secured term loan B due in 2027. We estimate pro forma adjusted leverage for the 12 months ended March 31, 2021, of about 5.3x. We assigned our 'B' issuer credit rating to Mad Engine. We also assigned our 'B' issue-level rating and '3' recovery rating to the proposed $250 million senior secured first-lien term loan

...- U.S.-based designer, producer, and distributor of licensed, branded, and private-label apparel and accessories Mad Engine Global LLC is acquiring Fifth Sun Holdings, a designer and distributor of licensed products in the print-on-demand and direct-to-garment markets. - A combination of equity and debt will finance the transaction, including a new $75 million asset-based lending (ABL) revolving credit facility due in 2026 (not rated) and $250 million senior secured term loan B due in 2027. We estimate pro forma adjusted leverage for the 12 months ended March 31, 2021, of about 5.3x. - We assigned our 'B' issuer credit rating to Mad Engine. - We also assigned our 'B' issue-level rating and '3' recovery rating to the proposed $250 million senior secured first-lien term loan maturing in 2027. The '3' recovery rating reflects our expectation for average (50%-70%; rounded estimate: 50%) recovery in the event of payment default. - The stable outlook reflects our expectation that the Mad Engine...

Research Update