S&P assigns Amsted notes BB

Standard & Poor's said it assigned its BB issue-level rating and 4 recovery rating to Amsted Industries Inc.'s proposed $500 million senior unsecured notes due 2022.

The 4 recovery rating indicates an expectation for an average (30%-50%) recovery in the event of a default.

As part of the transaction, the company also plans to refinance its existing $300 million unrated revolver (undrawn at closing) with a new unrated $400 million revolving credit facility and an unrated $100 million term loan.

Proceeds from the proposed notes and term loan will be used to repay its existing $500 million senior unsecured notes due 2018 and for general corporate purposes.

The BB corporate credit rating on Amsted remains unchanged and the outlook is stable.

S&P said it assesses the company's business risk as "fair," primarily reflecting its strong technical capabilities and long-standing customer relationships, which should allow it to maintain its good market position.

However, Amsted operates in cyclical railcar and vehicular products end markets, where demand can be highly volatile, the agency said.

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