S&P ups Shiloh ratings

Standard & Poor's said it raised its corporate credit rating on Shiloh Industries Inc. to B+ from B. The outlook is positive.

S&P said the upgrade reflects Shiloh's reduced debt leverage, materially improved cash flow protection measures, and enhanced financial flexibility. Shiloh's debt has declined by about $23 million since July 2003 because of the disciplined use of free cash flow to lower leverage. Cost control and operating efficiency measures have been employed to reduce the company's breakeven point and materially increase EBITDA margins. Earlier this year, Shiloh entered into a new senior credit facility that carries less restrictive covenants.

S&P said the ratings reflect Shiloh's well-below-average business profile and weak financial profile, as a manufacturer of steel blanks and stamped components for the automotive industry.

Credit protection measures have improved materially. Total debt to EBITDA declined to 2.5x in the second quarter ended April 30, and EBITDA (less capital spending) interest coverage reached 3.9x.

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