S&P gives Meritor notes B-

Standard & Poor's said it assigned its B- issue rating and 5 recovery rating to Meritor Inc.'s proposed $250 million senior unsecured notes due 2021.

Meritor indicated that it will use the net proceeds from the proposed note offering to fund the amount of 8 1/8% notes due 2015 tendered under the company's outstanding offer and for general corporate purposes, which may include repayment of debt, acquisitions, investments, additions to working capital, capital expenditures and advances to or investments in subsidiaries.

S&P said the B corporate credit rating on Meritor reflects its assessment of the company's financial risk profile as "highly leveraged" with debt to EBITDA of 7 times and the business risk profile as "weak" with exposure to the highly cyclical commercial-vehicle markets.

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