S&P rates Bombardier loan B+

Standard & Poor's said it assigned its B+ bank loan rating, with a recovery rating of 3, to Bombardier Recreational Products Inc.'s proposed $1.15 billion term loan B facility, indicating the expectation of a meaningful recovery of principal in a payment default scenario.

Proceeds from the new facility will be used to pay a substantial special distribution to shareholders and refinance the company's existing debt, the agency added.

At the same time, S&P said it affirmed its ratings on Bombardier, including the B+ long-term corporate credit rating on the company.

The outlook is negative.

S&P said that the ratings on Bombardier reflect the company's high debt leverage, volatile demand for its core products, seasonal operating profits and intense competition while these factors are partially offset by the company's solid market position, brand equity, well-established dealer network and the stable margins and revenues of the parts and accessories component of the business.

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