S&P lowers Kinetek

Standard & Poor's said it lowered Kinetek Holdings Corp.'s long-term corporate credit rating to B- from B.

The outlook is negative.

"The rating action reflects our belief that the company is at a heightened risk of a covenant violation in the near term given the weak end markets and stepdowns in its covenant levels," S&P analyst Helena Song said in a statement.

It also reflects the company's weakened performance resulting from challenging economic conditions in U.S. and Europe, where the company generates most of its revenue, the agency added.

Ratings reflect the company's highly leveraged financial profile and the competitive and cyclical nature of the global electrical motors and motion controls systems industry in which it operates, the agency said.

Partly mitigating these risks are the company's well-established market positions in several niches and its relatively sound profitability underpinned by low-cost manufacturing capabilities, S&P said.

As of Sept. 30, total adjusted debt-to-EBITDA ratio was about 5.9x.

© 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.