S&P rates Federal-Mogul loan B

Standard & Poor's said it assigned its B issue rating and 4 recovery rating to Federal-Mogul Corp.'s proposed $1.2 billion senior secured term loan B due Jan. 2, 2017.

The 4 recovery rating indicates an expectation of average recovery in the event of a payment default.

The agency said the B corporate credit rating on Federal Mogul reflects its highly leveraged financial risk profile.

Total adjusted debt to EBITDA of about 7x exceeds S&P's expectation for the rating, but the agency said the equity offering would modestly reduce debt.

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