S&P lifts GenCorp

Standard & Poor's said it raised the corporate credit rating on GenCorp Inc. to B from B-, its first-lien secured debt to BB- from B+ and its subordinated debt to CCC+ from CCC. The recovery rating on the first-lien secured debt remains unchanged at 1, and the recovery rating on the subordinated debt remains unchanged at 6.

The outlook is stable.

"We are raising our ratings on GenCorp by one notch to reflect the company's improved liquidity position," S&P analyst Lisa Jenkins said in a statement.

"The ratings on GenCorp reflect its highly leveraged capital structure, weak financial performance, limited diversity and modest scale of operations compared with competitors. Offsetting these challenges to some extent is the company's good niche positions in aerospace propulsion and solid backlog. We characterize GenCorp Inc.'s business profile as weak and its financial profile as highly leveraged."

The company's performance remains weak, since higher pension expense and remediation costs are offsetting more favorable contract performance, S&P said.

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