S&P cuts Jason, rates loans B & CCC+

Standard & Poor's said it lowered its corporate credit rating on Jason Inc. to B from B+ and removed the rating from CreditWatch, where it was placed with negative implications on March 18.

The outlook is stable.

At the same time, the agency assigned its B issue-level rating to the company's proposed first-lien credit facilities (which comprise a $40 million revolver and a $300 million first-lien term loan) with a 3 recovery rating, which indicates an expectation for meaningful recovery (50%-70%) in a payment default scenario.

S&P also assigned its CCC+ issue-level rating to the company's proposed new $120 million second-lien term loan with a 6 recovery rating, which indicates an expectation for negligible recovery (0%-10%) in a payment default scenario.

The company plans to use the proceeds to fund the acquisition and repay existing debt. The transaction is expected to close in the second quarter.

"The downgrade reflects our expectation for leverage to increase as a result of the transaction," S&P credit analyst Svetlana Olsha said in a news release.

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