S&P: Zest Holdings LLC Senior Secured Recovery Rating Revised To '4' From '3' After Add-On
We expect the company to use proceeds to redeem the second-lien term loan.
Our 'B' corporate credit rating on Zest reflects our assessment of the company's business risk as weak and the financial risk profile as highly leveraged. The outlook is stable.
Our assessment of a weak business risk profile reflects significant product concentration (namely, its Locator product offering), which has a patent expiring in October 2018, the elective nature of procedures incorporating the Locator product, and a relatively small addressable market. Our business risk assessment also incorporates the company's leading position in removable overdenture attachment systems, high loyalty among dental practitioners, low manufacturing costs, and the low percentage of overall cost in the dental procedure, all leading to very strong EBITDA margins. The highly leveraged financial risk profile reflects adjusted debt leverage of about 5.5x to 6.0x.