S&P rates Amsted Industries notes BB

S&P said it assigned a BB rating and 3 recovery rating to Amsted Industries Inc.'s proposed $400 million senior unsecured notes due 2027.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The agency said it expects the transaction to be leverage neutral because the company plans to use the proceeds from the proposed debt to redeem the remaining $300 million of its outstanding 5% senior unsecured notes due 2022 and partially repay $100 million of its term loan A.

The BB rating and 3 recovery rating on Amsted's outstanding 5 3/8% senior unsecured notes due 2024 are unchanged.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The BB issuer credit rating and stable outlook on Amsted also are unchanged.

The stable outlook reflects an expectation that the company will maintain adjusted free operating cash flow-to-debt of between 5% and 10% over the next 12 months, S&P said.

The agency also said it expects that Amsted will sustain EBITDA margins in the 18% range, while continuing to generate good free operating cash flow, the agency said.

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