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Published on 2/23/2011 in the Prospect News Bank Loan Daily.

S&P rates JMC loan BB-

Standard & Poor's said it affirmed JMC Steel Group's B corporate credit rating.

The outlook is positive.

S&P assigned a BB- issue-level rating to the company's proposed $400 million senior secured term loan. The recovery rating is 1, indicating the expectations of very high (90% to 100%) recovery in the event of a default.

Proceeds from the debt transaction along with equity from the Zekelman family will be used to partially fund the acquisition of a portion of Carlyle's shares, refund existing debt and pay transaction costs.

The ratings reflect the company's weak business risk profile and aggressive financial risk profile, the agency said.

The ratings consider the volatile end markets, exposure to volatile steel prices and significant reliance on nonresidential construction spending, the agency added.


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