OREANDA-NEWS. S&P Global Ratings today said it affirmed its 'B' long-term corporate credit rating on Kansas City - based de-icing rock salt producer and packager Kissner Milling Co. Ltd. (Kissner). The outlook is stable.

At the same time, S&P Global Ratings affirmed its 'B' issue-level rating, with a '4' recovery rating, on Kissner's US$220 million senior secured notes due 2019. The '4' recovery rating on the term loan indicates our expectation for average (30%-50%; higher end of the range) recovery under our simulated default scenario.

"We are affirming our ratings on Kissner following our review of the company's credit profile. Our updated analysis of Kissner now includes BSC Holdings Inc., which we view as complementary to Kissner, providing some operational and geographic diversification," said S&P Global Ratings credit analyst Michelle Dathorne. "Pro forma our consolidation of BSC into our analysis, our view of Kissner's business and financial risk profiles remain unchanged," Ms. Dathorne added.

The affirmation reflects our assessment of Kissner's financial risk profile as highly leveraged and business risk profile as weak, both of which are unchanged.

In addition, our analysis of Kissner's business risk and financial risk profiles now includes our assessment of BSC's contribution to Kissner's overall credit profile, as we view the companies' operations as complementary and closely aligned. We assess Kissner's business risk profile, which incorporates BSC, as weak based on Kissner's small scale and limited product offering, which, although they hamper the company's business risk profile are somewhat offset by our assessment of the improved integration benefits of Kissner's operating link with BSC, and our estimate of the two entities' consolidated cost structure.

Our revised cash flow adequacy and financial risk profile for Kissner, pro forma our consolidation of BSC, remain unchanged at highly leveraged, reflecting our view that the company will generally maintain credit metrics consistent with this assessment.

The stable outlook reflects S&P Global Ratings' opinion that Kissner's cost structure, EBITDA margins, cash flow generation, and associated cash flow metrics will continue to support the 'B' rating during our 12-month outlook period. Furthermore, we expect the company should be able to maintain its five-year, weighted-average FFO-to-debt ratio near 10%, which we view to be at the stronger end of the cash flow ratio range indicative of a highly leveraged financial risk profile.

We could lower the rating if Kissner's weighted-average FFO-to-debt ratio trended below 6%, and we expected it would remain below this level on a consistent basis. Cash flow metrics could deteriorate due to unexpected dividend payouts or consecutive years of mild winter weather conditions. We could also lower the rating if Kissner's liquidity position deteriorated to a level we viewed to be less than adequate.

An upgrade in the next 12 months is unlikely because we expect the company will maintain credit measures consistent with a highly leveraged financial risk profile for at least the next few years. Nevertheless, we could raise the rating if we believed Kissner was able to increase its five-year, weighted-average FFO to debt above 12%, and maintain its cash flow metrics at or above this level.