S&P gives Stewart & Stevenson B, notes B-

Standard & Poor's said it assigned its B corporate credit rating to Stewart & Stevenson LLC and its B- rating to the company's $150 million senior unsecured notes.

The outlook is stable.

The one notch differential between the corporate credit rating and the notes reflects the company's ability to incur senior debt in excess of 15% of assets, the agency said.

S&P noted that the ratings on Stewart & Stevenson reflect the reliance on cyclical end markets for a meaningful percentage of revenues and cash flow, a short track record as an operating company in its current configuration and a highly leveraged financial profile, adding that concerns are somewhat offset by the more stable cash flow and margin characteristics of the company's aftermarket business, low annual maintenance capital spending requirements and long standing relationships with OEM suppliers.

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