TEXT-S&P rates Meritor Inc's notes 'B-'
Nov 28 - Standard & Poor's Ratings Services today assigned its 'B-' issue rating and '5' recovery rating to Troy, Mich.-based commercial truck part supplier Meritor Inc.'s proposed $150 million senior unsecured convertible notes due 2026, issued under Rule 144A without registration rights. The '5' recovery rating indicates our expectation of modest (10% to 30%) recovery in the event of a payment default. Meritor has indicated that it will use the net proceeds from the proposed note offering to repay outstanding debt. The 'B' corporate credit rating on Meritor reflects our assessment of the company's financial risk profile as "highly leveraged" with debt to EBITDA of 5.9x and the business risk profile as "weak" with exposure to the highly cyclical commercial-vehicle markets. Although the company has improved its operational performance, we expect that economic activity will remain weak in Europe and Latin America in 2013. RELATED CRITERIA AND RESEARCH -- Criteria Guidelines For Recovery Ratings On Global Industrials Issuers' Speculative-Grade Debt, Aug. 10, 2009 -- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008 RATINGS LIST Meritor Inc. Corporate Credit Rating B/Stable/-- Meritor Inc. $150 mil sr unsecd convertible notes due 2026 B- Recovery Rating 5 Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com. Use the Ratings search box located in the left column.
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