S&P rates Directed Electronics loan

Standard & Poor's said it assigned its B+ corporate credit rating to Directed Electronics Inc. At the same time, S&P assigned its B+ senior secured bank loan rating and 3 recovery rating to Directed Electronics' proposed $138 million of senior secured credit facilities.

The outlook is stable.

The senior credit facilities consist of a $25 million revolving credit facility due 2009 and a $113 million U.S. term loan due 2010. Proceeds from the transaction will be used solely to refinance certain existing debt, pay a one-time dividend to the shareholders, and provide for working capital and general corporate requirements.

S&P said the ratings on Directed Electronics reflect the company's weak financial profile, with very aggressive leverage, and well-below-average business profile. These risks are mitigated by the company's solid position in the markets it serves, focus on markets having growth potential, and modest free cash flow generation that will enable debt reduction.

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