S&P rates Valmont loan, notes

Standard & Poor's said it assigned its BB corporate credit rating to Valmont Industries Inc. At the same time, S&P assigned its BB rating to Valmont's $225 million senior unsecured bank credit facility due 2009 and its B+ rating to the company's proposed $150 million senior subordinated notes due 2014.

The outlook is stable.

Proceeds from the proposed notes offering and bank borrowings will be used to partly refinance existing debt and to fund the $105 million (plus $10 million of assumed debt) acquisition of Newmark International Inc. Valmont agreed to purchase all of the shares of Newmark for cash from Newmark's parent company, Pfleiderer AG of Neumarkt, Germany.

S&P said the ratings on Valmont reflect its good position in niche markets, benefits from its variable cost structure, established distribution networks, and considerable geographic and end-market diversity.

This is tempered by the high cyclicality of its end markets, concerns regarding pressures on the company's margins from the rapid escalation in the cost of steel, its main raw material, and limited discretionary cash flow.

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