S&P rates Grede, loan B+

Standard & Poor's said that it assigned a preliminary B+ corporate credit rating to Grede Holdings LLC and a preliminary B+ issue-level rating and 4 recovery rating to Grede's proposed $175 million six-year senior secured term loan. The 4 recovery rating indicates the expectation that lenders will receive average (30% to 50%) recovery in the event of a payment default.

The outlook is stable.

The ratings reflect Grede's weak business risk profile and aggressive financial risk profile, S&P said.

The ratings consider the multiple industry risks facing companies supplying the light vehicle and commercial vehicle markets, including volatile demand, high fixed costs, intense competition and pricing pressures, as well as raw material recovery risk, the agency added.

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