S&P cuts Dana notes, rates loan BBB-

S&P said it assigned a BBB- issue-level rating and a 1 recovery rating on Dana Inc.' s senior secured $375 million term loan B, which matures in 2026.

The 1 recovery rating indicates an expectation for very high (90%-100%; rounded estimate: 95%) recovery in the event of a default.

The company will increase its commitment under the existing revolving credit facility (unrated) by $150 million and it will obtain a senior secured incremental term loan A of up to $225 million (unrated).

The company will use proceeds from the incremental term loan A and new term loan B to help fund its acquisition of GrazianoFairfield AG.

As a result of the increase in secured debt, S&P said it revised the recovery rating on the senior unsecured notes to a 5 (rounded estimate: 25%) from a 4 (rounded recovery estimate: 35%), and therefore lowered the issue-level rating on the senior unsecured notes to BB- from BB.

“We expect Dana to continue to generate solid earnings and cash flow while maintaining stable credit measures,” the agency said in a news release.

“We believe the company can maintain credit metrics that are appropriate for the current rating because of its neutral financial policy, fair scope and scale, competitive market position, and operating efficiency.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.