S&P rates Tower Auto

Standard & Poor's said it assigned its B+ rating to the five-year $375 million senior secured term loan B (first lien) and five-year $50 million senior secured revolving credit facility (first lien) of R.J. Tower Corp. A recovery rating of 2 also was assigned.

A B- rating was assigned to R.J. Tower's 5.5-year $140 million senior secured term loan C (second-lien letter of credit facility), and a recovery rating of 5, indicating the likelihood of negligible recovery of principal (0%-25%) in the event of a default. The facility will be guaranteed by parent company, Tower Automotive Inc. (B+/negative/--).

Proceeds from the new credit facility, along with a planned capital markets transaction, will be used to repay an existing bank credit facility and Tower's $200 million 5% convertible subordinated notes due in August 2004. S&P said these transactions will improve financial flexibility by extending debt maturities and increasing available liquidity.

At the same time, S&P said it affirmed its B+ corporate credit rating on Tower. The outlook is negative.

S&P said the ratings on Tower reflect the firm's below-average business profile as a leading supplier of vehicle structural components and assemblies to the cyclical and intensely competitive automotive supply industry and a weak financial profile.

© 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.