S&P rates RBC Bearings secured debt BB+, unsecured B+

S&P said it assigned its BB issuer credit rating to RBC Bearings Inc. with a stable outlook.

At the same time, S&P assigned its BB+ issue-level and 2 recovery ratings to the company's senior secured debt and its B+ issue-level and 6 recovery ratings to the company's senior unsecured debt. The issuer of the debt is Roller Bearing Co. of America, Inc.

RBC Bearings has announced its intention to acquire the Dodge mechanical power transmission division of Asea Brown Boveri Ltd. for $2.9 billion. RBC will finance the transaction with a $1.3 billion term loan A, $500 million unsecured bonds, $600 million of common stock, $400 million of mandatory convertible preferred shares of equity, and cash from the balance sheet.

“The stable outlook on RBC reflects our expectation for continued end market recovery and solid free cash flow generation. This should allow the company to reduce S&P Global Ratings-adjusted debt leverage to about 4x or lower over the next 12-18 months,” S&P said in a news release.

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