S&P rates Spitzer, loan B

Standard & Poor's said it assigned a preliminary B corporate credit rating to Spitzer Industries Inc., along with a preliminary B rating to its proposed $120 million senior secured term loan due 2017 and 4 recovery rating to the loan, indicating 30% to 50% recovery in a default.

The proceeds will be used to repay outstanding debt and to provide a dividend to its shareholders, S&P said.

The outlook is stable.

The ratings reflect the company's position as an operator exposed to highly cyclical end markets, relatively small size and scale, limited operating diversity, a concentrated customer base and the low barriers to entry in Spitzer's business space, the agency said.

The ratings also consider its moderate leverage, a history of free cash flow generation and minimal capital expenditure requirements, S&P added.

Moody's rates Spitzer loan B2

Moody's Investors Service said it assigned a first-time B2 corporate family rating to Spitzer Industries, Inc.

The agency also said it assigned a B2 rating to the company's proposed $145 million credit facilities, consisting of a $25 million revolver and $120 million term loan.

The outlook is stable.

The proposed term loan will be used to refinance existing debt of about $44 million, fund a $72 million dividend to shareholders and pay fees.

The ratings reflect the company's track record through the recent energy sector trough, established and numerous customer relationships, degree of variability in its cost structure and low capital spending needs, Moody's said.

The ratings are restrained by the company's small size, risks inherent in its turnkey contracts, the need to establish a history of operating as a leveraged company in a volatile and cyclical sector, the agency said, and high leverage on a small base of fixed assets.

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