S&P: HHI loan unchanged after add-on

Standard & Poor's said the B+ rating and 3 recovery rating on ASP HHI Acquisition Co. Inc.'s term loan B due 2018 are unchanged following the proposed $100 million add-on to the loan to fund a distribution to sponsors.

The 3 recovery rating indicates 50% to 70% expected default recovery.

At this level, the debt issues are rated the same as the corporate credit rating on the rated entity, ASP HHI Intermediate Holdings Inc., S&P said.

Pro forma for the transaction, the debt leverage is about 4.1x and is estimated that it will improve and remain in the 3.5x to 4.0x range over the next two years, the agency said.

Despite the higher debt level, S&P said it believes an improvement in HHI's credit metrics is likely to stem from improved profitability on the company's new business wins amid the industry recovery in North America, increased pricing on its long-term contracts with vital customers and operational cost reductions.

The stable outlook reflects a view that HHI can maintain positive free operating cash flow generation in the year ahead with leverage of about 4.0x or less, the agency added.

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