S&P revises Oshkosh notes recovery to 4

Standard & Poor’s said it revised the recovery rating on Oshkosh Corp.’s senior unsecured notes to 4 from 3, indicating 30% to 50% expected default recovery.

The BB+ issue-level rating on the company’s notes, as well as its BB+ corporate credit rating and stable outlook on are unchanged.

The revised recovery rating reflects an assessment that the announced increase in lender commitments under Oshkosh’s revolving credit facility to $850 million from $600 million results in lower recovery expectations for the company’s unsecured notes in a default scenario, S&P said.

The company is expected to utilize the upsized revolving credit facility to fund the call of $250 million senior unsecured notes due 2020 and for general corporate purposes, S&P said.

The ratings reflect the company’s fair business risk profile and intermediate financial risk profile, the agency said.

The ratings also consider its market-leading positions in most end markets, good scale and scope and a view that its profitability is volatile and relatively low for a company in the capital goods sector, despite recent improvement, S&P said.

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