S&P rates Allison Transmission notes B-

Standard & Poor's said it assigned a B- rating to Allison Transmission Inc.'s $550 million senior unsecured payment-in-kind toggle notes due 2015 being issued under Rule 144A.

The outlook is negative.

Proceeds will help repay its $1.1 billion bridge loan.

S&P also affirmed all of the issuer's existing ratings, including the B+ corporate credit rating.

The ratings reflect the Allison's highly leveraged financial profile, which more than offsets its leading market shares, good end-market diversity and high margins relative to those of other automotive or commercial vehicle suppliers, the agency said.

The overall business risk profile is weak, reflecting the industry's cyclicality, high fixed costs, customer concentration and raw material price sensitivity, S&P said.

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