S&P rates Altra Industrial loans BB-, notes B+

S&P said it assigned its BB- issuer credit rating to Altra Industrial Motion Corp. The outlook is stable.

At the same time, S&P assigned a BB- issue-level rating and 3 recovery rating to the company's proposed senior secured debt, which consists of a $300 million first-lien revolving credit facility due 2023 and a $1.34 billion first-lien term loan B due 2025. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default.

S&P also assigned a B+ issue-level rating and 5 recovery rating to the company's proposed $400 million senior unsecured notes due 2026, which are issued by the company's subsidiary, Stevens Holding Co., Inc. The 5 recovery rating indicates an expectation for modest (10%-30%; rounded estimate: 15%) recovery in the event of a payment default.

“The ratings on Altra reflect the company's larger scale, good geographic diversity, and improved pro forma profitability, offset by its relatively narrow scope of operations,” S&P said in a news release.

“The ratings also acknowledge our view that pro forma leverage will climb above 4x S&P Global Ratings' adjusted EBITDA, from slightly more than 2x in 2017.”

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