S&P rates Pre-Paid Legal B, loans BB-, B

Standard & Poor's said it assigned a B corporate credit rating to Pre-Paid Legal Services Inc. following the completion of the leveraged buyout transaction by MidOcean Partners.

The agency also said it assigned a BB- rating to the company's five-year $30 million revolving credit facility with a recovery rating of 1, indicating 90% to 100% expected recovery in a default.

S&P also said it assigned a BB- rating to the company's 5.5-year $246 million first-lien first-out term loan with a recovery rating is 1.

The agency also said it assigned a B rating to the company's 5.5-year $150 million last-out term loan. The recovery rating is 3, indicating 50% to 70% expected recovery in a default.

The outlook is stable.

The ratings reflect the company's narrow product focus and the small niche segment of the legal service plan industry, as well as a belief that the gradual decline in the membership base since 2006 will be difficult to reverse over the next one to two years, S&P said.

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