S&P gives Dana notes BB-

S&P said it assigned its BB- issue-level and 5 recovery rating to Dana Inc.’s proposed $400 million of senior unsecured notes and placed the issue-level rating on CreditWatch with negative implications.

The 5 recovery rating indicates an expectation for modest (10%-30%; rounded estimate: 20%) recovery in the event of a default. The ratings on Dana's senior unsecured debt remain unchanged, S&P said.

Concurrently, S&P raised the issue-level rating on the company's term loan B to BBB- from BB+ and revised the recovery rating to 1 from 2. The 1 recovery rating indicates an expectation for very high (90%-100%; rounded estimate: 90%) recovery in the event of a payment default.

“The issue-level rating remains on CreditWatch, where we placed it with negative implications on March 26, 2020. This action follows Dana's removal of a $500 million senior secured bridge, which it replaced with $400 million of senior unsecured notes,” S&P said in a press release.

The agency said it views the transaction as mostly leverage neutral.

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