S&P assigns Doosan loan BB-

Standard & Poor's said it assigned its B+ long-term corporate credit rating to Doosan Infracore Bobcat Holdings Co. Ltd.

The outlook is stable.

At the same time, the agency assigned its BB- issue rating and 2 recovery rating to a proposed $1.3 billion senior secured term loan belonging to subsidiaries Doosan Infracore International Inc. (DII) and Doosan Holdings Europe Ltd. (DHEL) that is due in 2021. DII and DHEL will be coborrowers of the term loan, and DIBH will guarantee the loan. The 2 recovery rating indicates an expectation that lenders can make a substantial recovery (70%-90%) in the event of a payment default.

Proceeds will be used to repay existing debt.

"The B+ corporate credit rating reflects the company's highly leveraged financial metrics, its exposure to the cyclical construction equipment industry, and the weak creditworthiness of the parent Doosan Infracore Co. Ltd. (DI; not rated) group," S&P credit analyst JunHong Park said in a news release.

"However, the company's good market position in compact construction equipment and gradually improving operating and financial performance temper these weaknesses, in our view. We assess the company's business and financial risk profiles as 'fair' and 'highly leveraged,' respectively."

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