S&P rates Caritor, loan BB-

Standard & Poor's said it assigned its BB- corporate credit rating to Caritor Inc.

At the same time, S&P said it assigned its BB- senior secured ratings, with a recovery rating of 3, to Caritor Inc.'s proposed $690 million senior secured bank facilities, which will consist of a $50 million revolving credit facility due 2013, a $600 million term loan B due 2013 and $40 million synthetic letter of credit.

The bank loan rating, which is the same as the corporate credit rating, along with the recovery rating, reflect the expectation of meaningful recovery of principal by creditors in the event of a payment default or bankruptcy, the agency said, adding that the proceeds from this facility will be used to finance the acquisition of Keane Inc. by Caritor.

The outlook is negative.

S&P noted that the ratings reflect Caritor's second-tier presence in a highly competitive and consolidating industry, the risks associated with integrating acquired operations and high debt leverage and these are only partially offset by a solid presence within its midmarket niche and above average industry operating margins.

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