S&P rates Metaldyne loan B+

Standard & Poor's said it affirmed the B+ corporate credit rating on Metaldyne LLC and maintained its stable outlook.

S&P also said it assigned a B+ rating and 4 recovery rating to the proposed $545 million senior secured term loan B and $75 million revolver. The 4 recovery rating indicates 30% to 50% expected recovery.

The ratings reflect Metaldyne's weak business risk profile and aggressive financial risk profile, S&P said.

The company faces multiple industry risks facing automotive suppliers, including volatile demand, high fixed costs, intense competition and severe pricing pressures, the agency said.

These risks more than offset the favorable fact that Metaldyne's products are used mostly in vehicle powertrains and have longer lives, S&P said.

Moderate free operating cash flow and possible future additional distributions to shareholders will likely limit significant debt reduction, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.