S&P cuts Douglas Dynamics loan to BB-

Standard & Poor's said it lowered its issue-level rating on Douglas Dynamics Inc.'s senior secured term loan to BB- from BB and revised the recovery rating to 3 from 2.

The actions follow Douglas' proposed upsizing of its senior secured term loan by $80 million from the original $125 million issued.

The BB- corporate credit rating and stable outlook are unaffected.

The company plans to upsize its term loan to acquire Henderson Products Inc., a snow and ice control equipment and services provider primarily serving municipal end markets in the U.S. The term loan's maturity will also be extended to 2021 from 2018.

With the larger loan size, the projected recovery on the credit facility drops below the 70% threshold for a 2 recovery rating, the agency said. The 3 recovery ratings on the term loan indicate an expectation for meaningful recovery (50% to 70%) in the event of a payment default.

The BB- issue-level rating on the credit facility is the same as the corporate credit rating on Douglas, which is in line with S&P’s notching guidelines for a 3 recovery rating.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.