S&P: Bombardier notes BB-

Standard & Poor's said it assigned its debt issue and recovery ratings to Bombardier Inc.'s (BB-/stable/--) proposed $1.8 billion senior unsecured notes.

These obligations comprise two tranches, the breakdown of the amount in each yet to be determined. S&P rates the notes BB- with a recovery rating of 4, which corresponds with average (30%-50%) recovery in a default scenario. S&P noted, however, the recovery on the senior unsecured debt falls to the low end of the range for the 4 recovery rating.

S&P said it understands that net proceeds will be used to finance the redemption of all of Bombardier's 7¼% senior notes due 2016, to finance the repayment at maturity of all of Bombardier's remaining 6.3% notes due May 1, 2014 and the remainder for general corporate purposes.

"Although the proposed debt issuance will result in somewhat weaker debt leverage, with our adjusted debt-to-EBITDA ratio expected to be about 5.7x at year-end 2014, the company will benefit from about US$500 million in additional liquidity," said S&P credit analyst Jamie Koutsoukis in a news release.

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