S&P rates Waterjet notes B+

Standard & Poor's said it assigned a preliminary B corporate credit rating to Waterjet Holdings Inc.

The agency also said it assigned a preliminary B+ rating to Waterjet's $200 million senior secured notes with a preliminary recovery rating of 2, indicating 70% to 90% expected default recovery.

The outlook is stable.

The ratings reflect the company's aggressive financial risk profile with pro forma leverage of about 4x, S&P said, and its vulnerable business risk profile considering its narrow scope of operations and cyclical end markets.

The agency also said it expects the activity of the company's end markets to continue to drive demand for the company's products.

Waterjet's vulnerable business risk considers the company's vulnerable competitive position, which stems primarily from its limited revenue base and execution risks related to the company's operating improvement plans, S&P said.

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