S&P rates Omnitracs loans B+, CCC+

Standard & Poor's said it assigned a B corporate credit rating to Omnitracs Inc. The outlook is stable.

S&P also assigned a B+ issue-level rating and 2 recovery rating to the company's proposed $445 million first-lien term loan maturing 2020. The 2 recovery rating indicates expectations for substantial (70%-90%) recovery in the event of payment default.

S&P also assigned a CCC+ issue-level rating and 6 recovery rating to the proposed $150 million second-lien term loan maturing 2021. The 6 recovery rating indicates expectations for negligible (0%-10%) recovery in the event of payment default.

"The ratings on Omnitracs reflect the company's 'weak' business risk profile and 'highly leveraged' financial risk profile (as defined by our criteria), incorporating the company's narrow product base and lack of stand-alone operating history, the potential for near-term operational disruption from integrating RoadNet with the existing business, and our view that the company's purchase by a private equity owner is likely to preclude sustained deleveraging over the longer term," said S&P credit analyst Molly Toll-Reed in a news release.

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