S&P upgrades Doosan Bobcat

S&P said it raised to BB- from B+ the long-term corporate credit rating on Doosan Bobcat Inc.

The agency also said it raised the rating to BB from BB- while maintaining the recovery rating at 2 on the $945 million senior secured term loan belonging to the company's subsidiaries, Clark Equipment Co. and Doosan Holdings Europe Ltd., which is due in 2021.

Clark and Doosan Holdings are co-borrowers of the term loan and Dooson Bobcat is the guarantor, S&P explained.

The outlook is stable.

Doosan Bobcat's stand-alone credit profile remains at BB.

The company is expected to improve its credit quality gradually over the next one to two years from a much-improved level in 2016, S&P said.

The agency said it estimates the group's adjusted debt-to-EBITDA ratio will improve to about 5.0x to 6.0x in 2017 and 2018, compared with 6.7x in 2016 and more than 10x in 2015.

The ratings also reflect the company's steady operating performance and ongoing restructuring and cost reduction efforts, S&P said.

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