S&P downgrades SRAM

Standard & Poor’s said it lowered the corporate credit rating on SRAM LLC to B+ from BB-.

The agency also said it revised the recovery rating to 3 from 4 on the company’s senior secured credit facilities, consisting of a $40 million revolver due 2018 and $715 million term loan due 2020. The 3 recovery rating indicates 50% to 70% expected default recovery.

The recovery rating revision reflects improved recovery prospects due to debt repayment under the facility.

However, S&P said it lowered the issue-level rating on this debt one notch to B+ from BB- in line with the recovery notching criteria and the lower corporate credit rating.

The outlook is negative.

The downgrades reflect a lower EBITDA forecast through 2016 for the company due to lower bike-components volumes in both the original-equipment manufacturer and aftermarket channels, the agency said.

The negative outlook reflects an expectation that leverage will spike to more than 5x in 2015, S&P said.

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