S&P rates Rexnord revolver BB+, notes B+

S&P said it affirmed its ratings on Rexnord LLC, including its BB- corporate credit rating, revised its outlook to positive from stable.

At the same time, the agency assigned a BB+ issue-level rating to the company's proposed $264 million revolving credit facility due 2023 and $800 million seven-year first-lien term loan due 2024. The 1 recovery rating indicates an expectation for substantial (90%-100%; rounded estimate: 95%) recovery in the event of a payment default.

S&P also assigned a B+ issue-level and 5 recovery rating to the company's proposed $500 million senior unsecured notes due 2025. The 5 recovery rating indicates an expectation for modest (10%-30%; rounded estimate: 10%) recovery.

“The outlook revision reflects Rexnord's improved credit measures as a result of the proposed repayment of about $294 million of debt (which we think demonstrates management's intention to deleverage the company) and our revised assessment of the equity content assigned to Rexnord's $400 million principal mandatory convertible preferred stock,” the agency said in a news release.

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