S&P rates KUKA notes B

Standard & Poor's said it assigned a preliminary B long-term corporate credit rating to KUKA AG.

The agency said it assigned a preliminary B- rating to KUKA's proposed €200 million second-lien secured notes. The preliminary recovery rating is 5, indicating 10% to 30% expected recovery in a default.

The outlook is stable.

The notes are part of a €400 million refinancing undertaken by KUKA. The remaining €200 million senior secured bank facilities comprise a €50 million revolving credit facility and a €150 million bank guarantee line, both of which are likely to mature in March 2014.

The ratings are constrained by the company's high exposure to the cyclical auto industry and weak and volatile operating margins, S&P said.

These constraints are partly offset by KUKA's strong and leading market positions in its niche markets and longstanding relationships, which provide high barriers to entry for competitors, the agency said.

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