S&P rates GGNSC Holdings loans B+, B-

Standard & Poor's said it assigned a B corporate credit rating to GGNSC Holdings LLC, a B+ rating with a recovery rating of 1 to the company's first-lien credit facility, which consists of a $50 million revolving credit and a $350 million term loan, and a B- rating with a recovery rating of 3 to the company's $100 million second-lien term loan. The outlook is stable.

The company will use the proceeds from the term loans as part of a larger deal, which includes a $1.4 billion commercial mortgage-backed securities transaction, to finance the acquisition of Beverly Enterprises Inc. by Pearl Senior Care Inc.

GGNSC Holdings is a newly formed parent company for the operating divisions that previously comprised most of the operations of Beverly Enterprises. S&P said the company's ratings reflect the chronic risks the company faces as a sizable participant in the nursing home and assisted-living industry, an industry subject to payment cuts.

This risk is somewhat mitigated by GGNSC's geographical dispersion and by a presence in related businesses that now comprise about 20% of total revenue, the agency said. Additionally, an earlier concern regarding substantial insurance exposure has been eased because of the new corporate structure by which each of GGNSC's 262 nursing homes are organized into individual limited liability corporations.

Debt to EBIDTA was 2.6x in 2005.

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