S&P gives Continental Alloys loan B

Standard & Poor's said it assigned its B rating and 3 recovery rating to Continental Alloys & Services Inc.'s proposed $180 million senior secured credit facilities.

At the same time, the agency said it affirmed the corporate credit rating of B.

The outlook is stable.

Continental will use proceeds to refinance existing bank debt, S&P noted, adding that the ratings reflect Continental's vulnerable business position as a niche supplier of metal products, the highly volatile and cyclical end-markets into which it sells large working-capital requirements, exposure to steel prices and a leveraged financial profile.

These weaknesses are only partially offset by the company's recent satisfactory financial performance, long-standing customer relationships and limited capital expenditure requirements, S&P said.

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