S&P rates Metaldyne loan BB+

Standard & Poor’s said it assigned a BB- corporate credit rating on Metaldyne Performance Group Inc.

The agency also said it assigned a BB+ rating with a 1 recovery rating to the senior secured term loan and revolver and B+ rating with 5 recovery rating to the $700 million senior notes.

The borrower is MPG Holdco I Inc., a wholly owned subsidiary of Metaldyne Performance.

The outlook is stable.

The agency also said it expects to withdraw all of the ratings on the three existing rated entities, ASP HHI Intermediate Holdings Inc., Metaldyne LLC and Grede Holdings LLC, at completion of the acquisition transaction and repayment of all existing debt at those entities.

The ratings reflect the company’s improved scale of operations and diversity upon merger, which should improve global support to its customers at sustainable EBITDA margins, S&P said.

The ratings also consider multiple industry risks facing automotive suppliers, including volatile demand, high fixed costs, intense competition and the potential for severe pricing pressures, the agency said.

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