S&P rates GPH Operating loans B+, CCC+

Standard & Poor's said it assigned a B corporate credit rating to GPH Operating Co. LLC.

The agency also said it assigned a B+ rating to $155 million first-lien senior secured credit facilities with a recovery rating of 2, indicating 70% to 90% expected default recovery.

S&P also said it assigned a CCC+ rating to a $45 million second-lien senior secured term loan with a recovery rating of 6, indicating 0% to 10% expected default recovery.

The proposed secured credit facilities will be co-issued by GPH operating subsidiaries, Dixie Chemical Co. Inc., Child Development Schools Inc. and Polyair Corp.

The outlook is stable.

GPH plans to use the proceeds from the proposed issuance to refinance outstanding borrowings, purchase co-investors' equity in subsidiaries and to fund a $35 million distribution to equity owners, the agency said.

The ratings reflect the company's small scale of operations, narrowly focused product lines in commodity industries, dependence on government funding levels in its education segment, leveraged capital structure and some uncertainty regarding financial policies, said James Siahaan, an S&P analyst.

These weaknesses are partially offset by good market shares in its product lines and fair business diversity, Siahaan said in a press release.

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