S&P rates Heckler & Koch notes CCC+

Standard & Poor's said that it has placed the CCC- long-term corporate credit rating on Heckler & Koch GmbH on CreditWatch with positive implications.

The CCC- issue rating on the company's existing €120 million of 9¼% senior secured notes was also placed on CreditWatch positive. The recovery rating on this instrument remains unchanged at 4, indicating average (30%-50%) recovery.

S&P assigned a CCC+ issue rating and a recovery rating of 4 to the proposed €290 million of senior secured notes. The recovery prospects are expected to be at the low end of the 30%-50% range.

The ratings reflect the expectation that, upon successful issuance of the proposed notes, the underlying corporate credit rating on the company will be raised to CCC+, the agency said.

The CreditWatch placements follow the company's announcement to issue €290 million in high-yield bonds, the agency added. This issue will be used to refinance both its existing €120 million of bonds that mature in July and the €170 million of payment-in-kind notes issued by indirect parent Heckler & Koch Beteiligungs GmbH.

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