S&P rates Russel Metals notes BB+

S&P said it assigned a BB+ rating and 4 recovery rating to Russel Metals Inc.'s proposed C$125 million senior unsecured notes issuance.

The 4 recovery rating indicates 30% to 50% expected default recovery.

The proceeds from this offering will be used primarily to repay amounts drawn under its corporate revolving credit facility, which totaled close to C$210 million at year-end 2017, S&P said.

The company's BB+ long-term corporate credit rating and stable outlook are unchanged following the issuance, which is effectively neutral to the company's credit measures, the agency said.

The bond issuance and corresponding increase in credit capacity enhance the company's financial flexibility to manage higher working capital requirements, particularly in a rising steel-price environment and periods of higher shipment volumes, S&P explained.

The company recently upsized its revolver by C$50 million and extended its maturity to 2021, resulting in C$400 million in total availability, the agency added.

The issuance also increases the permanence of the company's debt structure for several years, S&P noted, and the potential for higher leverage related to future short-term facility draws.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.