S&P rates Signode loan B

Standard & Poor's said it assigned a B corporate credit rating to Signode Industrial Group Lux SA, along with a B rating to the company's proposed $2.15 billion senior secured credit facility.

The recovery rating is 3, indicating 50% to 70% expected default recovery.

The outlook is stable.

The facility includes a $400 million revolver, which will be undrawn at closing, and a $1.75 billion term loan.

S&P also said it expects the company to issue $750 million in other unsecured debt.

The proceeds will be used to fund the acquisition.

The ratings reflect Signode's fair business risk profile and highly leveraged financial risk profile, S&P said.

The company has the No. 1 or No 2 position for most of its products in the bulk industrial packaging market, the agency said.

But Signode is exposed to raw materials such as paper, plastic and metals, S&P said.

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