S&P: Key Safety unchanged on add-on

Standard & Poor’s said the B+ corporate credit rating on KSS Holdings Inc. is unchanged, along with the B+ rating on Key Safety Systems Inc.’s first-lien term loan due August 2021, following news of a $50 million add-on offering to the term loan.

Key Safety Systems is the borrower under the credit agreement and is the operating company of KSS Holdings Inc., S&P said.

The 3 recovery rating, which indicates 50% to 70% expected default recovery, also is unchanged.

The proceeds from the add-on will be used to expand and improve the company’s existing operations, support new business wins and gain further market share in the automotive safety systems market, S&P said.

KSS has been funding its recent capital expenditure requirements with its $75 million revolver. This has temporarily elevated the company’s leverage levels so far this year, the agency said.

But, the company’s leverage is now expected to gradually improve to 4.6x by the end of 2015 and reach 4.3x in 2016, S&P said.

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