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S&P may boost Douglas Dynamics
Standard & Poor's said it placed the B+ corporate credit rating on Douglas Dynamics LLC on CreditWatch with positive implications.
The agency also said it affirmed the BB issue-level rating on the company's existing senior secured term loan due 2013. S&P also said it assigned a BB issue-level rating to the company's proposed new $40 million senior secured term loan due 2016, based on proposed terms and conditions. The recovery rating on this debt is 2, indicating an expectation of 70% to 90% recovery in a default scenario.
The action reflects an expectation that the proposed initial public offering and repayment of senior notes would, if completed as planned, result in meaningful financial leverage reduction, S&P said.
While the operating performance of the company will remain highly correlated to unpredictable weather patterns, the company has a track record of consistent free cash flow generation, the agency said.
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