S&P downgrades Real Industry

S&P said it lowered the corporate rating on Real Industry Inc. to CCC+ from B and placed the rating on CreditWatch with negative implications.

The agency also said it assigned a rating of B to the company's asset-backed loan due 2022 borrowed by Real Alloy Holding, Inc. and Real Alloy Canada Ltd.

S&P also said it lowered the rating on the company's senior secured notes due 2019 to CCC+ from B and placed the ratings on CreditWatch with negative implications.

The 1 recovery rating on the company's ABL facility indicates 90% to 100% expected default recovery.

The 3 recovery rating on the company's senior secured notes reflects an expectation for 50% to 70% expected default recovery.

Real Industry is producing poor credit metrics and weak cash flow, S&P said, and its upcoming maturities represent an over-arching credit concern if not refinanced in the next two to three quarters.

The company stated in its 10-Q that there is a substantial doubt about its ability to continue as a going concern, especially if it is unable to refinance its senior secured notes, the agency added.

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