S&P rates EnerSys notes BB+

Standard & Poor’s said it affirmed its BB+ corporate credit rating on EnerSys. The outlook is stable.

In addition, S&P affirmed its BBB issue-level rating on the company’s existing first-lien credit facilities. The recovery rating on this debt remains 1, indicating an expectation for very high (90% to 100%) recovery in the event of a payment default. The first-lien credit facilities consist of a $500 million revolving credit facility due 2018 and a $150 million term loan due 2018.

S&P also affirmed the BB+ issue-level rating on the company’s senior unsecured convertible notes due 2038. The recovery rating on this debt remains 3, indicating an expectation of meaningful (50% to 70%; lower half of the range) recovery in the event of a payment default.

At the same time, S&P assigned a BB+ issue-level rating and 4 recovery rating to the company’s proposed $300 million senior unsecured notes due 2023. The 4 recovery rating indicates an expectation for average (30% to 50%; upper half of the range) recovery in the event of a payment default.

“We expect EnerSys to use transaction proceeds to refinance its 3.375% convertible notes due 2038, repay a portion of debt outstanding under its revolver, and pay related premiums and fees,” said S&P credit analyst Jaissy Lorenzo in a news release.

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