S&P assigns Headwaters notes B, loan on positive watch

Standard & Poor's said it assigned its B subordinated debt rating to Headwaters Inc.'s proposed $150 million subordinated notes offering due 2016.

At the same time, the agency said it placed its BB- senior secured bank loan and 2 recovery ratings on Headwaters' $475 million credit facilities on CreditWatch with positive implications, based on expectations that the note offering proceeds will be used to reduce the company's term loan.

All other ratings, including the BB- corporate credit rating, were affirmed, the agency said.

The outlook is stable.

S&P added that the ratings on Headwaters reflect meaningful business risks, including an aggressive acquisition strategy, an alternative energy business whose prospects are uncertain and cyclical demand for its products.

These factors overshadow Headwaters' strengths, including its favorable position within selected niche businesses, healthy operating margins, moderate capital spending requirements and demonstrated willingness to issue equity to help fund growth, the agency noted.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.