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S&P rates OM loans BB-
Standard & Poor's said it affirmed the BB- corporate credit rating on OM Group Inc.
The agency also said it assigned a BB- rating and 3 recovery rating to its proposed $900 million senior secured credit facilities. The 3 recovery rating indicates 50% to 70% expected recovery in a default.
The outlook is stable.
The company plans to use the proceeds, along with $50 million in equity and cash on the balance sheet, to finance its purchase of Vacuumschmelze GmbH & Co. KG. This includes refinancing existing OM Group and Vacuumschmelze debt, S&P said.
The proposed facilities consist of a $200 million multicurrency revolving credit facility due 2016, $100 million term loan A due 2016 and $600 million term loan B due 2017.
The agency said the acquisition is a significant step in the company's continuing transformation away from unpredictable, cobalt-driven earnings and into downstream value-added applications.
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