S&P assigns Dynacast loans B, B- ratings

Standard & Poor’s said it affirmed its B corporate credit rating on Dynacast International LLC. The outlook is stable.

At the same time, S&P assigned a B issue-level rating to the company’s proposed $530 million first-lien term loan due 2022 and $50 million revolving credit facility due 2020. The 3 recovery rating indicates an expectation for meaningful recovery (50% to 70%) in the event of payment default.

S&P also assigned a B- issue-level rating to the company’s proposed $170 million second-lien term loan due 2023. The 5 recovery rating indicates an expectation for modest recovery (10% to 30%) in the event of payment default.

“Dynacast is the largest player in the niche precision die cast components industry,” said S&P credit analyst Jaissy Lorenzo in a news release.

S&P noted the company’s end-market diversity is limited, with over one-third of its revenues generated from the highly cyclical automotive industry. Other end markets include consumer electronics, health care and computer and datacom.

Good geographic diversity and the ability to pass on raw material costs somewhat offset this risk, the agency added.

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