S&P rates Ball notes BB+

Standard & Poor’s said it assigned its BB+ issue-level rating (the same as the corporate credit rating) and 3 recovery rating (at the lower end of the range) to Ball Corp.’s proposed $1 billion senior unsecured notes due 2025. The 3 recovery rating indicates an expectation of meaningful (50%-70%; at the lower end of the range) recovery in the event of a payment default.

All other ratings, including the BB+ corporate credit rating, remain unchanged. However, S&P notes that the 3 recovery rating on the existing unsecured debt has moved to the lower half of the 50%-70% range, largely due to a modest reduction in the share of enterprise value attributed to the U.S. obligors and a slight increase in local borrowings at foreign non-guarantor subsidiaries.

The outlook is negative.

Ball intends to use the proceeds from the proposed notes offering to repay borrowings under its $3 billion revolving facility due February 2018.

S&P said the ratings on Ball reflect its “satisfactory” business risk profile as a leading global can manufacturer with last-12-month sales of $8.5 billion and a “significant” financial risk profile.

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