Vertiv Group Corp. Proposed Term Loan Assigned 'B+' Issue-Level Rating (Recovery Rating: '3')

NEW YORK (S&P Global Ratings) March 1, 2021--S&P Global Ratings today assigned its 'B+' issue-level and '3' recovery ratings to Vertiv Group Corp.'s ('B+/Stable') proposed $2.184 billion senior secured term loan due 2027. The '3' recovery rating indicates our expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in the event of default. The company will use the net proceeds repay the amount outstanding on its existing term loan and to reduce the applicable margin on the debt at least 25 basis points, which we estimate would save it roughly $5.5 million in annual interest expense. We published a bulletin on Feb. 25, 2021, pertaining to this transaction under the assumption that the new tranche of the loan was fungible with

...- Vertiv's proposed $2.184 billion senior secured term loan due 2027 is rated 'B+' with a '3' recovery rating, indicating our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. - The $455 million asset-based lending (ABL) revolving credit facility due 2025 is unrated. - Our simulated default scenario contemplates a default occurring in 2025 due to a deep global recession that sharply reduces the company's sales volume. We assume pricing pressures exacerbate the distress and cause Vertiv to face cash shortfalls that lead to a default. - We assess the company's recovery prospects based on a gross reorganization value of approximately $1.46 billion, which reflects our $266 million emergence EBITDA estimate and 5.5x multiple....

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