Research Update: Tosca Services LLC Upgraded To 'CCC+' Following Term Loan Exchange; Outlook Is Negative; New Debt Rated

Tosca closed its term loan exchange on Sept. 17, 2024, and raised an additional $100 million super-priority first-out first-lien term loan. We believe the company materially improved its liquidity position, but it will continue to face free operating cash flow (FOCF) deficits given the capital-intensive nature of the business. Therefore, we raised our issuer credit rating on Tosca to 'CCC+' from 'SD' (selective default). We assigned our 'B' issue-level rating and '1' recovery on Tosca's new $100 million super-priority first-out first-lien term loan due November 2028. Our '1' recovery rating reflects our expectation for very high (90%-100%; rounded estimate: 95%) recovery in the event of a default. We are also assigning our 'CCC' issue-level rating and '5' recovery rating to

...- Tosca closed its term loan exchange on Sept. 17, 2024, and raised an additional $100 million super-priority first-out first-lien term loan. - We believe the company materially improved its liquidity position, but it will continue to face free operating cash flow (FOCF) deficits given the capital-intensive nature of the business. - Therefore, we raised our issuer credit rating on Tosca to '###+' from '##' (selective default). - We assigned our 'B' issue-level rating and '1' recovery on Tosca's new $100 million super-priority first-out first-lien term loan due November 2028. Our '1' recovery rating reflects our expectation for very high (90%-100%; rounded estimate: 95%) recovery in the event of a default. - We are also assigning our '###' issue-level rating and '5' recovery rating to its $605 million second-out first-lien term loan due November 2028. Our '5' recovery rating reflets our expectation for modest recovery (10%-30%; rounded estimate: 20%) recovery in the event of a default. -...

Research Update