S&P rates Coinstar convertibles BB

Standard & Poor's said it assigned a BB rating with a recovery rating of 4 to Coinstar Inc.'s $200 million 4% convertible senior notes due 2014 and affirmed the company's BB corporate credit rating.

The outlook is positive.

Proceeds will be used to repay Coinstar's $87.5 million term loan and to pay down approximately $105 million of the outstanding balance under the $400 million revolver.

The agency said the ratings on Coinstar reflect a business characterized by significant customer concentration, short-term contracts and aggressive growth plans that could hinder profitability in the short term.

Positive considerations include the company's industry-leading position in automated coin-counting and DVD kiosk machines, satisfactory credit measures and historically strong free cash flow generation, S&P said.

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