S&P cuts ABB/Con-Cise, facilities

S&P said it lowered the corporate credit rating on ABB/Con-Cise Optical Group LLC to B- from B.

The outlook is stable.

The agency also downgraded the issue-level rating on the company's $518 million senior secured first-lien credit facilities – consisting of a $100 million revolving credit facility due in 2021 and $418 million term loan due in 2023 – to B- from B. The recovery rating is 3, indicating an opinion that creditors can expect meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default.

At the same time, S&P lowered the issue-level rating on the $160 million senior secured second-lien term loan due in 2024 to CCC from CCC+. The recovery rating is 6, indicating the opinion that creditors can expect negligible (0%-10%; rounded estimate: 0%) recovery in the event of a payment default. Debt outstanding as of March 31, 2017, totaled $588 million.

"The downgrade primarily reflects recent steep price increases by ABB's largest supplier," S&P credit analyst Gerald Phelan said in a news release.

The agency forecast lower profitability and weaker credit metrics over the next 12 months, including adjusted debt to EBITDA around 8.5 times.

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