S&P rates Samvardhana Motherson notes BB+

S&P said it assigned a BB+ rating to a proposed issuance of up to $300 million senior secured notes to be issued by Samvardhana Motherson Automotive Systems Group BV, a tier 1 supplier to the global automotive industry.

The agency also said it affirmed the BB+ ratings on the existing €500 million senior secured notes due 2021 and €100 million senior secured notes due 2025.

The recovery rating on the proposed and existing senior secured notes is 4, indicating 30% to 50% expected default recovery.

The ratings on the proposed senior secured notes are constrained by the existence of prior-ranking liabilities and by the large amount of pari passu senior secured debt, S&P explained.

The ratings are supported by a going-concern valuation of the company, strong asset base and fair security package provided to noteholders, the agency said.

The proceeds will be used to fund growth and improve liquidity, S&P added.

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