S&P assigns Spirit AeroSystems notes BB-

S&P said it assigned its BB- issue-level rating to Spirit AeroSystems Inc.'s planned $800 million senior of secured first-lien notes due 2029. The recovery rating is 1 indicating very high (90%-100%; rounded estimate: 95%) recovery in default. The agency also lowered its rating on the company's senior secured second-lien notes to B-, one notch below the issuer credit rating, from B and revised the recovery rating to 5 from 4.

The company plans to use proceeds to satisfy its $500 million of senior secured first-lien notes due 2025 and $300 million of unsecured notes due 2023.

“The lower issue-level rating on the second-lien secured notes reflects the higher amount of first-lien debt ahead of them in the capital structure. The transaction will not add new debt to the capital structure and is therefore neutral for leverage. The company is also extending the maturity of its existing $593 million first-lien term loan to 2027 from 2025. We view the financing as favorable for credit due to the extension of Spirit's debt maturities though it will likely result in higher borrowing costs,” S&P said in a press release.

The outlook is stable.

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