S&P drops Keystone loan to B-

Standard & Poor's said it lowered the issue-level rating on Keystone Automotive Operations Inc.'s senior secured term loan facility to B- from B and revised the recovery rating on the debt to 4 from 2.

At the same time, the agency said it affirmed the company's B- corporate credit and CCC senior subordinated note ratings, adding that the recovery rating on the senior subordinated notes remains unchanged at 6.

The outlook is negative.

"The rating action reflects reduced recovery expectations for the term loan facility," said S&P credit analyst Jerry Phelan, "due to materially lower demand for the company's highly discretionary products which could persist for the foreseeable future and hurt emergence value in the event of a bankruptcy filing."

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