S&P downgrades ATI

Standard & Poor’s said it lowered the rating on ATI Holdings Inc.’s secured debt to B from B+ and revised the recovery rating on this debt to 3 from 2.

The 3 recovery rating indicates 50% to 70% expected default recovery.

The downgrades reflect weakened recovery prospects for secured lenders following the recent $42.7 million upsize on the term loan as the secured debt is now a greater proportion of the total debt, S&P said.

The company’s corporate credit rating of B is unchanged and reflects its weak business risk and highly leveraged financial risk, the agency said.

The ratings also consider its concentrated geographic presence, vulnerability to economic cycles, low barriers to entry and an ambitious growth strategy, S&P said.

This is partially offset by a favorable mix of payers and strong profit margins, the agency said.

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