OREANDA-NEWS. S&P Global Ratings today raised its issue-level ratings on Princeton, N. J.-based chassis lessor Interpool Inc.'s second-lien notes to 'B' from 'B-' and revised its recovery ratings on the notes to '5' from '6'. The '5' recovery rating indicates our expectation for modest recovery (10%-30%; lower half of the range) in the event of a payment default.

We raised our issue-level ratings on the second-lien notes to reflect their improved recovery prospects now that the company has redeemed $230 million of the notes (out of the original $300 million). The remaining balance on the notes will mature in 2019.

RECOVERY ANALYSIS

Key analytical factorsWe continue to value the company on a going-concern basis using a discrete asset value (DAV) approach, which is consistent with our analysis of other chassis lessors. Our simulated default scenario assumes a payment default in 2020 due to a decrease in demand that is precipitated by an economic downturn. Key analytical factorsWe have valued the company on a discrete asset basis as a going concern assuming a valuation below net book value in 2020 and a limited market for its assets. Simulated default assumptionsSimulated year of default: 2020Based on a DAV analysisThe asset-based lending revolver is 80% drawn at defaultSimplified waterfallNet enterprise value (after 5% administrative costs): $912 millionValuation split (obligors/nonobligors): 98%/2%Priority claims: $1.115 billionValue available to secured claims from collateral (65% foreign stock pledge): $12 millionValue available to unsecured claims from 35% not pledged: $0Secured first-lien debt claims: $2 million--Recovery expectations: Not applicableValue available to second-lien debt claims: $10 millionSecured second-lien debt claims: $74 million--Recovery expectations: 10%-30% (lower half of the range)Total value available to unsecured claims: $6 millionNote: All debt amounts include six months of prepetition interest. Collateral value equals asset pledge from obligors after priority claims plus equity pledge from nonobligors after nonobligor debt.