S&P rates Tekni-Plex loan B

Standard & Poor's said it assigned a preliminary B- corporate credit rating to Tekni-Plex Inc., along with a 2 recovery rating and preliminary B rating to the company's proposed $285 million first-lien term loan due 2016. The 2 rating indicates a 70% to 90% expected recovery in a default. The proposed $60 million asset-based lending revolving credit facility is unrated.

The outlook is stable.

The ratings reflect the packaging and tubing manufacturer's highly leveraged financial risk profile, including high debt balances and weak cash flow generation, S&P said.

The ratings also reflect the company's weak business risk profile, characterized by exposure to the price fluctuations of its polymer-based raw materials and customer concentration, the agency said, partially offset by moderate end-market and geographic diversity.

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