Research Update: SRAM LLC Ratings Affirmed Despite Leveraging Dividend Recap; Outlook Stable; New Term Loan Rated

SRAM LLC plans to issue a $1.1 billion term loan B facility due 2028 and a $100 million revolving credit facility due 2026. The company will use proceeds from the term loan to refinance the existing term loan B and distribute about $750 million to shareholders. We are assigning our 'BB-' issue level rating and '3' recovery rating to the proposed senior secured credit facility. At the same time, despite the distribution, we are affirming the 'BB-' issuer credit rating on SRAM because we expect that leverage will remain comfortably below our 4x downgrade threshold in 2021. The stable outlook reflects our expectation that SRAM will grow EBITDA by around 30%-35% in 2021 and end the year with leverage of

...May 4, 2021 - SRAM LLC plans to issue a $1.1 billion term loan B facility due 2028 and a $100 million revolving credit facility due 2026. The company will use proceeds from the term loan to refinance the existing term loan B and distribute about $750 million to shareholders. - We are assigning our '##-' issue level rating and '3' recovery rating to the proposed senior secured credit facility. - At the same time, despite the distribution, we are affirming the '##-' issuer credit rating on SRAM because we expect that leverage will remain comfortably below our 4x downgrade threshold in 2021. - The stable outlook reflects our expectation that SRAM will grow EBITDA by around 30%-35% in 2021 and end the year with leverage of around 3x....

Research Update