S&P lowers United Subcontractors, gives loans B, CCC+

Standard & Poor's said it lowered its corporate credit rating on United Subcontractors Inc. to B from B+ in connection with the company's proposed $125 million debt-financed dividend.

Other ratings on the company were also lowered, the agency said. The outlook is stable.

At the same time, S&P said it assigned its B bank loan rating and 3 recovery rating to the company's proposed $350 million senior secured first-lien credit facilities and a CCC+ bank loan rating and 5 recovery rating to the company's proposed $200 million senior secured second-lien term loan.

The downgrade reflects the weaker financial risk profile that the agency said it expects United Subcontractors to have following this transaction.

S&P added that the ratings on the company reflect the company's modest revenue base, relatively narrow product focus, cyclical end market, supplier-concentration risk, limited geographic diversity and highly leveraged financial risk profile.

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