S&P ups Douglas Dynamics

Standard & Poor's said it raised the corporate credit rating on Douglas Dynamics LLC to BB- from B+ and removed the rating from CreditWatch, where it was placed with positive implications on April 15.

S&P also affirmed the BB rating on the company's senior secured term loans due 2013 and 2016 with 2 recovery rating.

The agency assigned a BB- corporate credit rating to parent Douglas Dynamics Inc.

"The BB- rating on Douglas Dynamics LLC and Douglas Dynamics Inc. reflects the completion of the IPO and subsequent repayment of debt, which results in meaningful financial leverage reduction," S&P analyst Gregoire Buet said in a statement.

The agency said it expects the company's operating performance will remain highly correlated to unpredictable weather patterns.

"However, Douglas has a track record of consistent free cash flow generation and we anticipate that it will adhere to financial policies that would result in credit measures consistent with our expectation for the BB- rating, including adjusted total debt to EBITDA of less than 4x," he continued.

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