$TWI - Press Release: S&P Rts Titan Snr Secured Nts 'B '; Afrms 'B ' CCR; Outlk Stbl
4:50 PM ET 9/24/13 | Dow Jones
The following is a press release from Standard & Poor's:
-- Quincy, Ill.-based wheel, tire, and undercarriage products
manufacturer Titan International Inc. plans to issue $400 million of new
senior secured notes. The company plans to use the proceeds along with cash on
hand to repay $525 million of existing senior secured notes.
-- We are assigning our 'B+' issue-level rating and '3' recovery rating
to Titan's proposed new $400 million senior secured notes.
-- We are also affirming our 'B+' corporate credit rating on Titan.
-- The outlook remains stable and reflects our expectation of steady
operating performance during the next 12 months amidst mixed conditions in the
company's various business segments.
NEW YORK (Standard & Poor's) Sept. 24, 2013--Standard & Poor's Ratings
Services said today that it has assigned its 'B+' issue-level rating and '3'
recovery rating to Titan International Inc.'s proposed $400 million senior
secured notes due 2020. The recovery rating indicates our expectation for
meaningful (50%-70%) recovery for lenders in the event of a payment default.
Standard & Poor's also said that it has affirmed its 'B+' corporate credit
rating on Titan. The outlook remains stable.
The rating on Titan reflects our assessment of the company's "weak" business
risk profile and "aggressive" financial risk profile. We view Titan's
management and governance as "fair."
The outlook is stable. "We expect Titan's credit measures to continue to
modestly exceed our expectations for the rating, providing some cushion if
demand for agricultural and construction equipment declines further than we
expect," said Standard & Poor's credit analyst Svetlana Olsha.
We could raise the rating if the company appears likely to maintain or improve
its credit measures and if it adheres to a financial policy that could support
a higher rating. Specifically, we could raise the rating by one notch if
Titan's profit trends improve in 2014 and if we expect the company to maintain
leverage below 4x, taking into account the highly cyclical nature of its
operations.
We could lower the rating if a meaningful reversal in the economic recovery
erodes the company's operating performance more than we expect, or if Titan
pursues large, debt-financed acquisitions. If, in these instances, we expect
leverage could likely exceed 5x for an extended period, we could lower the
rating.
RELATED CRITERIA AND RESEARCH
-- Methodology: Management And Governance Credit Factors For Corporate
Entities And Insurers, Nov. 13, 2012
-- Methodology: Business Risk/Financial Risk Matrix Expanded, Sept. 18,
2012
-- Methodology And Assumptions: Liquidity Descriptors For Global
Corporate Issuers, Sept. 28, 2011
-- Criteria Guidelines For Recovery Ratings On Global Industrials
Issuers' Speculative-Grade Debt, Aug. 10, 2009
-- Corporate Criteria: Analytical Methodology, April 15, 2008
-- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008
-- Corporate Criteria: Ratios And Adjustments, April 15, 2008
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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
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Primary Credit Analyst: Svetlana Olsha, New York (1) 212-438-1467;
svetlana.olsha@standardandpoors.com
Secondary Contact: Gregoire Buet, New York (1) 212-438-4122;
gregoire.buet@standardandpoors.com
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> Dow Jones Newswires
September 24, 2013 16:50 ET (20:50 GMT)
