S&P: Milacron on positive watch

Standard & Poor's said its CCC corporate credit and its other ratings on Milacron Inc. remain on CreditWatch, where they were placed Feb. 12, but the implications were revised to positive from developing.

The revision to positive reflects the company's announcement that it plans to offer $225 million of senior secured notes, using proceeds to tender for the €115 million 7.625% debt maturity in April 2005, and repay a $75 million term loan. In addition, it is expected that, in conjunction with the note offering, Milacron will replace its existing asset-based revolving credit facility with a new facility.

In March 2004, Glencore Finance AG (unrated) and Mizuho International plc jointly provided Milacron with $100 million in new capital via convertible debt securities, which along with existing cash balances was used to repay the company's $115 million 8.375% debt due March 15.

If the proposed transactions are completed, S&P said it will raise Milacron's corporate credit rating to B- and assign a positive outlook. The proposed senior secured notes would be rated CCC+, reflecting the collateral package securing the notes but also the amount of priority obligations, including various obligations of non-guarantor subsidiaries, which are senior to the notes.

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