S&P: Cortes NP Acquisition Corp.'s (d/b/a Vertiv) $750 Million Proposed Senior Unsecured Notes Rated 'B' (Recovery Rating: 5)
The company will use proceeds to finance a portion of Platinum Equity's $4 billion acquisition of an 85% equity stake in Emerson Electric Co.'s Network Power business. This transaction was considered as part of our overall rating on Cortes NP Acquisition Corp. (d/b/a Vertiv), and therefore the corporate credit rating and outlook are unchanged. Moreover, the issue-level and recovery ratings on the proposed $2.3 billion term loan debt at Cortes NP Acquisition Corp. likewise are unchanged.
The corporate credit rating on Cortes NP Acquisition Corp. reflects its highly leveraged financial risk assessment, with leverage pro forma for the transaction about 5.6x and expected to improve to near 5x over the next 12 months. We assess the company's business risk as satisfactory, given its good market position and established customer base, partially offset by participating in a competitive market with well-capitalized companies and the risks inherent with becoming a stand-alone business. For the complete corporate credit rating rationale, see our research update on Cortes NP Acquisition Corp., published Sept. 16, 2016. For the recovery analysis, see our recovery report on Cortes NP Acquisition Corp. to be published shortly.