S&P rates McJunkin loan B

Standard & Poor's said it revised its outlook on McJunkin Red Man Corp. to positive from stable and affirmed the B+ corporate credit rating on the company.

The agency said it also assigned a B issue level rating to the company's proposed $750 million term loan due 2019. The recovery rating on the term loan is 5, indicating an expectation of modest recovery under S&P's default scenario.

"The outlook revision follows our assessment that McJunkin's margin expansion and lower debt levels will likely result in stronger credit metrics that are more in line with a higher rating, given our view that energy sector demand for the company's pipes, valves and fittings should remain relatively stable over the coming year," said S&P credit analyst Gayle Bowerman in a news release.

"The company has improved its credit profile considerably this year by significantly reducing debt and improving operating leverage. The positive outlook also underscores our view that McJunkin will be able to sustain margins at current levels due to its realigned product mix and attentive inventory management."

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