S&P: Rexnord to positive

Standard & Poor's said it affirmed its ratings, including the B corporate credit rating, on Rexnord LLC and revised the outlook to positive.

"The outlook revision reflects its expectation that Rexnord is likely to continue improving its credit measures in fiscal 2012 even though end-market conditions remain mixed," said S&P credit analyst Dan Picciotto.

"The company's ultimate parent, Rexnord Corp., filed an S-1 registration statement in May 2011 with the SEC for an initial public offering of up to $700 million.

"If successful, the company plans to use a portion of the proceeds to repay up to $300 million of subordinated notes due 2016. While Rexnord remains highly leveraged, with debt to EBITDA of about 7x and funds from operations to adjusted debt of less than 10%, we expect these metrics to improve to about 6x or less and FFO to debt to approach 10% in the next year, even without an IPO," he added.

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