S&P rates Amscan loan B

Standard & Poor's said it affirmed Amscan Holdings Inc.'s B corporate credit rating and removed it from CreditWatch, where it was placed with positive implications on Sept. 28.

Amscan said it also assigned a B secured rating to the company's proposed $675 million senior secured term loan credit facility with a 3 recovery rating, indicating the expectation for meaningful (50%-70%) recovery for noteholders in the event of a payment default.

The outlook is positive.

The proceeds will be used to pay a $310 million special dividend to its equity sponsors and repay borrowings under its existing term loan facility.

The ratings consider the company's weak business risk profile, narrow business focus, participation in the highly competitive and fragmented party goods industry and exposure to the difficult retail environment and weak consumer spending, S&P said.

The ratings also reflect the company's strong presence in the niche party goods industry and the industry's somewhat recession-resistant characteristics, the agency said.

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