S&P rates Dana Financing notes BB-

S&P said it assigned BB- issue-level and 4 recovery ratings to Dana Inc.'s planned €425 million of senior unsecured notes due 2031. Subsidiary Dana Financing Luxembourg Sarl will issue the notes. The 4 recovery rating indicates average (30%-50%; rounded estimate: 40%) recovery if Dana defaults.

The company plans to use the proceeds to redeem $200 million of its outstanding 5¾% senior unsecured notes due 2025, repay $245 million of borrowings under its revolving credit facility, and pay related fees and expenses.

“We would expect the company to repay the remaining outstanding balance of the 5¾% senior unsecured notes due 2025 over time. Because this is largely a refinancing transaction for debt repayment, Dana's leverage will not increase and the recovery prospects for its senior unsecured noteholders will remain materially unchanged. Therefore, we rate the new senior unsecured notes at the same level as our issue-level rating on the company's existing senior unsecured debt,” S&P said in a statement.

The outlook is stable.

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