S&P rates Oshkosh notes BB+

Standard & Poor's said it assigned its BB+ rating to Oshkosh Corp.'s proposed $250 million senior unsecured notes due 2025.

The recovery rating on the notes is 4, indicating an expectation for average (30% to 50%) recovery in the event of a payment default.

Proceeds, along with available cash, will be used to redeem Oshkosh’s outstanding $250 million unsecured notes due 2020.

The BB+ corporate credit rating and stable outlook remain unchanged.

S&P said Oshkosh’s corporate credit rating reflects its "fair" business risk profile and "intermediate" financial risk profile. The "fair" business risk profile reflects the company's market-leading positions in most end markets, its good scale and scope as well as the agency’s view that its profitability is volatile and relatively low for a company in the capital goods sector, despite recent improvement.

S&P believes Oshkosh's financial policy, which includes targeted reported debt to EBITDA of 1 time to 2 times, supports an "intermediate" financial risk profile after accounting for the company's potential cash flow and leverage volatility.

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