S&P lowers Terex notes, rates new issues B+

Standard & Poor's said it affirmed the BB- corporate credit rating on Terex Corp.

The agency also said it lowered the rating on the company's existing senior unsecured notes to B+ from BB-. The recovery rating also was revised to 5, indicating 10% to 30% expected default recovery, from 4.

S&P also said it assigned a B+ rating and 5 recovery rating to the company's proposed $850 million senior unsecured notes, which are to be issued through separate dollar-denominated and euro-denominated offerings.

Both of the issues will be guaranteed by Terex and certain wholly owned domestic subsidiaries. The dollar notes will be issued by Terex. The issuer of the European notes is Terex International Financial Services Co., an Irish subsidiary of Terex.

The outlook is stable.

The downgrade reflects the increased amount of outstanding notes after the transaction that reduces recovery prospects for this class of debtholder, S&P said.

The company's operating performance will continue to improve next year, bringing credit measures in line with expectations for the rating, the agency said.

The proceeds of the new issues will be used to refinance $800 million of subordinated notes due 2017 and to pay related fees and expenses, S&P said.

The ratings consider the company's aggressive financial risk profile and fair business risk profile, the agency said.

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