S&P rates United Components loan B

Standard & Poor's said it raised the corporate credit rating on United Components Inc. to B from B- and removed the rating from CreditWatch, where it was placed in July with positive implications.

The agency also said it assigned a final B rating and 3 recovery rating on the new $425 million term loan B and $75 million revolving credit line.

The outlook is positive.

These ratings previously had been assigned on a preliminary basis. The agency also said it withdrew the ratings on the company's term loan D, which was repaid, and on the subordinated notes, which will be repaid on Oct. 25.

The upgrade reflects a view that near-term risks to the company's financial flexibility have been reduced by the senior debt refinancing, S&P said.

But S&P said the company will remain highly leveraged following the proposed senior debt transaction, with lease-adjusted total debt-to-EBITDA of about 6x.

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