S&P upgrades Alliance Laundry notes

Standard & Poor's said it raised Alliance Laundry Systems LLC's senior subordinated notes due 2013 to B- with a recovery rating of 4 from CCC+ with a recovery rating of 5 and revised the outlook to positive from negative.

The remaining ratings were affirmed, including the B- corporate credit rating.

The agency said the improved recovery prospects for senior subordinated noteholders primarily reflect additional bank debt repayment, which reduces the amount of priority claims ahead of subordinated noteholders.

The outlook revision reflects the company's improved liquidity and covenant cushion after the company repaid about $21 million in bank debt through the first nine months of fiscal 2009, S&P said, adding that the company continues to track close to its budget and expects to generate about $76 million in EBITDA for fiscal 2009.

The ratings on Alliance Laundry balance its narrow product focus, the susceptibility of its sales to raw material cost increases and a meaningful volume declines during the economic downturn against its strong, defendable leading market shares in the roughly $550 million North American standalone commercial laundry segment of the industry.

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