S&P rates Gundle/SLT loans B-, CCC+

Standard & Poor's said it raised the corporate credit rating on Gundle/SLT Environmental Inc. by one notch to B- from CCC+ and removed the ratings from CreditWatch, where they were placed with positive implications in March.

The outlook is stable.

Standard & Poor's also said it assigned preliminary ratings to the company's proposed $205 million to $210 million of credit facilities.

The company's proposed $165 million to $170 million first-lien facilities, consisting of a $40 million to $45 million revolving facility and a $125 million term loan, have been assigned a preliminary issue rating of B- with a preliminary recovery rating of 3, indicating 50% to 70% expected recovery in a default.

The proposed $40 million second-lien term loan has been assigned a preliminary issue rating of CCC+ with a preliminary recovery rating of 5, indicating 10% to 30% recovery in a default.

The proceeds will be used to refinance its $51.9 million asset-based revolving facility and $150 million of 11% senior subordinated notes.

The upgrade reflects the company's improving operating performance during the past year, attributable to an improving economic environment, increased demand for the company's products and benefits derived from pricing improvements and cost reduction initiatives, S&P said.

Assuming that the refinancing transaction is executed as contemplated, the agency said it expects the company's liquidity to be adequate, with debt maturities extended out until 2016 and sufficient headroom under financial covenants.

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