S&P applies BB+ to Allegion notes

Standard & Poor's said it assigned it BB+ issue-level rating to Allegion plc’s proposed senior unsecured notes due 2023.

The recovery rating is 3, indicating an expectation of meaningful recovery (50% to 70%; at the high end of that range) in the event of default. While its recovery methodology implies a higher recovery for the proposed senior notes, the agency capped the recovery rating for the senior notes at 3 because of a heightened possibility that additional priority or pari passu debt might be incurred in advance of an actual default.

Allegion’s BB+ corporate credit rating, as well as its BBB and BB+ issue ratings, on the company's senior secured bank loans and existing senior unsecured notes, respectively, remain unchanged.

The outlook is positive.

"Our positive outlook reflects the potential for an upgrade to 'BBB-' if Allegion successfully integrates its three recently announced acquisitions and reduces debt leverage below 3.25x while continuing its prudent financial policy as it relates to shareholder returns," S&P credit analyst Thomas Nadramia said in a news release.

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