S&P affirms Key Safety on merger news

Standard & Poor’s said it affirmed the B+ corporate credit rating on KSS Holdings Inc.

The outlook is stable.

The agency also said it affirmed the B+ rating on parent company Key Safety Systems Inc.’s senior secured debt. The 3 recovery rating on the term loan is unchanged, indicating 50% to 70% expected default recovery.

The affirmations follow news of the company’s proposed merger with Ningbo Joyson Electronic Corp. and its plans to seek a change-of-control waiver from its lenders that will allow its existing financing to remain in place, the agency said.

The ratings reflect a view that KSS will continue to benefit from the company’s high revenue and earnings visibility over the next two years, S&P said.

This is mainly due to the global increase in demand for safety products, driven by increased regulation, the agency said.

The ratings also consider the prospect that the company may gain market share following the significant recall issues at its competitor, Takata, S&P said.

The stable outlook reflects a view that the company will reduce its debt over the next 12 months, allowing it to maintain a debt-to-EBITDA ratio of about 4x to 4.5x, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.