S&P rates Brock B+ and loans B+, B-

Standard & Poor's said that it has assigned a B+ corporate credit rating to both Brock Holdings II Inc. and its wholly owned subsidiary Brock Holdings III Inc.

The outlook is stable.

S&P assigned a B+ issue-level rating with a recovery rating of 3 to Brock's proposed new $105 million revolving credit facility and $490 million first-lien term loan, and a B- issue-level rating with a recovery rating of 6 to its proposed $210 million second-lien term loan.

The ratings reflect the expectations that Brock's track record of consistent free operating cash flow generation as well as modestly improving demand should allow the company to gradually improve its financial metrics following the proposed dividend recapitalization, S&P said.

The ratings also consider the company's weak business risk profile, reflecting its participation in a highly competitive industry despite its leading position, and its aggressive financial profile, the agency said.

The rating assumes that, despite expectations for only modest revenue growth this year, the company will be successful in improving the profitability of its key large contracts in 2011 and that annual free operating cash flow will be around $50 million, the agency added.

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