S&P rates Engility loan BB-, notes BB-

Standard & Poor's said it assigned a BB- corporate credit rating to Engility Corp., along with a BB+ rating with a 1 recovery rating to its proposed $300 million senior secured credit facilities.

The credit facilities consist of a $100 million revolving credit facility and a $200 million term loan, both due 2017.

The 1 rating indicates 90% to 100% expected recovery in a default.

S&P also said it assigned a BB- rating and 3 recovery rating to the company's proposed $250 million senior unsecured notes due 2019. The 3 rating indicates 50% to 70% expected recovery in a default.

The outlook is stable.

The proceeds will be used to pay a special cash dividend to its parent, L-3.

The ratings reflect the company's long-standing relationship with the Department of Defense and other key U.S. government agencies and high recurring revenue on its contracts unrelated to the Iraq and Afghanistan wars, S&P said.

The agency said it expects that the U.S. government contracting industry will be increasingly competitive and that U.S. government budget pressures will continue to intensify.

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