Kenan Advantage raised by S&P Global Ratings to B- on operations, maturities

Kenan Advantage Group Inc. was upgraded today by S&P Global Ratings to B- and a stable outlook, from CCC+ and developing, reflecting operations through the pandemic and an improvement in the company's debt maturity profile pro forma for an announced $1 billion first-lien term loan and $150 million revolver, both due in 2026. Ratings assigned a B rating to the new loans, while upgrading the company's outstanding unsecured notes to CCC from CCC-.

Ratings said Kenan's 2020 operating performance was "better than expected," with 2020 profitability "at about the same level as in 2019" in spite of lower revenue. The agency projects credit metrics will improve further this year, aided by recent acquisitions and EBITDA margin improvement, estimating leverage will decline to under 6x in 2021.

S&P Global Ratings noted that following the closing of the new term loan and revolver, the company will not face "material near-term maturities." Ratings added that the company's $405 million of unsecured notes due July 2023 will remain outstanding.

The North Canton, Ohio, company provides tank truck transportation and logistics services in North America. It delivers fuels, chemicals, specialty products, food products and industrial gases, operating out of about 300 terminals and satellite locations. It is owned by private equity sponsor OMERS.