S&P rates Hutchinson convertibles B-

Standard & Poor's said it assigned a B+ corporate credit rating to Hutchinson Technology Inc. and a B- rating to the company's $225 million convertible subordinated notes. The outlook is stable.

S&P characterized the company's business profile as vulnerable, citing a lack of business diversity, participation in a technology-intensive and volatile niche market; high capital requirements and customer concentration; and manufacturing challenges.

These factors are partially offset by a strong market position within a niche market, solid secular growth trends, good customer coverage and technology barriers to entry, the agency said.

Following the new note sale, adjusted total debt to EBITDA is estimated at 3.1x.

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