S&P rates Ozburn-Hessey loan B

Standard & Poor's said it assigned a B rating with a recovery rating of 3 to Ozburn-Hessey Holding Co. LLC's new $380 million senior secured credit facility and affirmed its other ratings, including the B long-term corporate credit rating.

The outlook was revised to negative from stable.

The agency said it affirmed the ratings based on stable industry fundamentals in the third-party logistics segment as well as Ozburn-Hessey's relatively stable mix of end markets.

At the same time, the outlook revision reflects the increased debt leverage resulting from Ozburn-Hessey's consolidation of some more cyclical international operations that provide global freight management and logistics services, S&P said. Pro forma for the proposed transaction to combine its foreign subsidiaries under Ozburn-Hessey Holding Co. LLC, credit measures are stretched for the rating and further earnings pressures could reduce covenant cushion and constrain liquidity, according to the agency.

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