S&P: DBO Holdings view positive

Standard & Poor's said it affirmed DBO Holdings Inc.'s B corporate credit rating and removed all ratings from CreditWatch with negative implications, where they were placed on April 15 because of expected weakness in cushion relative to covenants.

The outlook is positive.

The B corporate credit rating reflects the company's weak business risk profile and aggressive financial risk profile, the agency said.

This is evidenced by the cyclical nature of the company's end markets, exposure to volatile steel prices, a significant reliance on nonresidential construction spending and high debt leverage, S&P noted.

"Our rating and outlook are based on our expectation that DBO Holdings will likely be able to maintain compliance with the 5.5x net debt leverage covenant governing its credit facility in the near term, after cushion relative to that covenant declined to around 6.5% as of March 31, 2010," S&P analyst Sherwin Brandford said in a statement.

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