S&P rates TransDigm loan BB-

Standard & Poor's said it assigned a BB- rating, one notch higher than the corporate credit rating, to TransDigm Inc.'s proposed $1.55 billion senior secured term loan facility due February 2017. The recovery rating is 2, indicating 70% to 90% recovery in a default.

The proposed term loan, which will not have any financial maintenance covenants, will refinance the company's existing $1.55 billion term loan maturing Dec. 6, 2016. The agency said it will withdraw the ratings on the repaid loan after the transaction is complete.

The ratings reflect expectations that the company's growing earnings and improving commercial aerospace market conditions, combined with contributions by the recently acquired McKechnie Aerospace Holdings Inc., will enable the company to de-lever and restore credit metrics to levels more appropriate for the rating over the next 18 to 24 months, S&P said.

The debt-financed purchase has considerably weakened the company's credit metrics and increased the financial risk profile, which is now viewed as highly leveraged, the agency said.

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