S&P rates Elyria notes B

Standard & Poor's said it assigned a B corporate credit rating to Elyria Foundry Co. LLC and a B rating with a recovery rating of 4 to the company's proposed $100 million second-lien senior secured notes.

The outlook is stable.

The proceeds from the issuance will be used to fund the company's acquisition of Hodge Foundry and to refinance existing debt obligations.

The agency said the speculative-grade ratings on Elyria reflect the company's highly leveraged financial profile and its vulnerable business profile. It competes in a highly cyclical industry, and margins have displayed variability.

Operating performance has been good recently, benefiting from healthy end-markets, and Elyria operates in the niche large casting industry, which, unlike the broader U.S. casting industry, is not heavily fragmented and is somewhat protected from foreign competition because of high shipping costs and quality issues, S&P said, adding that Elyria should benefit from robust end markets in the near term.

© 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.