S&P Rates Collins & Aikman $400M Notes B-, Outlook
New York, August 9-- Standard & Poor's Ratings Services has assigned its 'B-' rating to Troy, Mich.-based Collins & Aikman Products Co.'s proposed $400 million senior subordinated notes due 2012.
The notes, to be issued under Rule 144A with registration rights, will be guaranteed by the company's parent, Collins & Aikman Corp. The 'B+' corporate credit rating of Collins & Aikman Corp. (Collins & Aikman) was affirmed. Total debt is about $2.2 billion, including various receivables sale programs and the present value of operating leases. The outlook is negative.
Proceeds from the new debt issue will be used to refinance $400 million of subordinated notes due June 2006, modestly improving the company's financial flexibility by extending debt maturities. The company is also currently pursuing a refinancing of its secured credit facilities, which mature in December 2005.
"The ratings reflect Collins & Aikman's exposure to the highly competitive and cyclical automotive supply industry and weak financial profile, which more than offset the company's strong market positions," said Standard & Poor's credit analyst Martin King.
Collins & Aikman is a publicly held company controlled by Heartland Industrial Partners L.P., which beneficially owns 40% of outstanding common stock.
Collins & Aikman is a major producer of vehicle interior products, including instrument panels, carpet , and plastic components.
