S&P rates Johnson Electric notes BBB

S&P said it assigned a BBB rating to the proposed issuance of dollar-denominated senior unsecured notes by Johnson Electric Holdings Ltd.

The proceeds will be used for refinancing and general corporate use.

The rating is equal to the issuer credit rating on Johnson Electric due to the minimal level of subsidiary borrowings and because the company has sufficiently low leverage to mitigate potential subordination risk, S&P said.

The proposed issuance has no material impact on Johnson Electric's leverage position, the agency said.

Johnson Electric's growth has been steady for the past few years, S&P said, and gross margins dipped to 23.8% from 24.9% over the same period. Leverage also remains low and liquidity is adequate, the agency said.

S&P said it expects Johnson Electric to maintain its solid market position, stable profitability and low cash flow leverage over the next two years.

The global automotive market also will continue to grow at a stable and modest pace, the agency added.

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