S&P rates Horizon loan B

Standard & Poor’s said it assigned a B corporate credit rating to Horizon Global Corp.

The agency also said it assigned a B rating and 3 recovery rating to the company’s proposed $215 million senior secured term loan B.

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

The transaction also includes an unrated $100 million senior secured asset-backed revolving credit facility due 2020, which will be undrawn at close.

The outlook is stable.

The ratings reflect the numerous industry risks automotive suppliers face, including volatile demand, high fixed costs, intense competition and the potential for severe pricing pressure, S&P said.

The ratings also consider the company’s modest size and exposure to highly cyclical end-markets, which is exacerbated by its high level of operating leverage, the agency said.

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