S&P rates Douglas Dynamics loan BB-

S&P said it assigned a BB- with a 3 recovery rating to Douglas Dynamics Inc.’s $250 million term loan due 2026 issued by its subsidiary Douglas Dynamics LLC. The 3 recovery rating indicates S&P’s expectation of 50%-70% recovery (rounded estimate: 50%) in the event of a default.

The agency also affirmed the BB- rating for the company and removed the ratings from CreditWatch with negative implications.

“The affirmation and removal from CreditWatch reflects our favorable view of the steps the company is taking to address its near-term debt maturities. Also, we believe the company will continue to generate positive free cash flow (albeit at lower levels) due to cost reductions and reduced capital expenditures (capex),” S&P said in a press release.

The outlook is negative.

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