S&P gives B- to Meritor notes

Standard & Poor's said it affirmed its B corporate credit rating on Meritor Inc. The outlook is stable.

At the same time, S&P assigned its B- issue-level rating to the company's proposed $225 million 10-year senior unsecured notes, with a recovery rating of 5, which indicates that lenders could expect modest (10%-30%) recovery in the event of a payment default.

S&P said its affirmation reflects S&P's view that Meritor's free operating cash flow could return to positive territory for fiscal year ending September 2014, though it will likely remain nominal, following some deleveraging as a result of the proposed refinancing and gradually improving operating performance.

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