S&P rates FR Flow Control loans B, BB-

S&P said it assigned a B issuer credit rating to FR Flow Control.

The agency also said it assigned a B rating and 3 recovery rating to the $40 million revolving credit facility and $180 million first-lien term loan B.

The 3 recovery rating indicates 50% to 70% expected default recovery.

S&P also assigned a BB- rating and 1 recovery rating to the $70 million first-lien term loan C.

The 1 recovery rating reflects 90% to 100% expected default recovery.

The proceeds of the term loan C will be deposited into escrow to fund an account that supports the reimbursement obligations under standby letters of credit, bank guarantees and performance bonds, S&P said.

The ratings reflect the company’s relatively narrow product focus, concentrated end-market exposure, below average profitability compared to its peers, high debt leverage and ownership by a financial sponsor, the agency said.

These ratings constraints are somewhat mitigated by the company's strong position in attractive niches, geographic diversity and recurring aftermarket revenue base, S&P said.

The negative outlook reflects the uncertainty associated with the company operating as a stand-alone entity, the agency said, as well as the execution risk in implementing proposed initiatives to improve margins, working capital, and cash flows.

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