S&P rates GSC loans B

Standard & Poor's said it assigned a B long-term counterparty credit rating to GSC Partners (NJ) LP and B ratings to its $120 million senior term loan facility maturing in 2012 and $20 million senior revolving credit facility.

The outlook is stable.

S&P said the ratings on GSC reflect its comparatively modest, yet highly predictable, earnings performance and a management and investment team that have a successful track record in growing assets since the company became an independent firm six years ago.

However, GSC is highly dependent on external sources of funding to promote growth. The agency described the company's capital profile, characterized by an equity base that is mostly comprised of variable partners' capital interests, as weak.

Although GSC's early 2006 recapitalization plan aims to introduce more permanent capital, the equity base will still reflect a preponderance of preferred stock that S&P considers of weaker quality. The combined mix of dependence on bank debt and lower quality capital contribute to GSC's highly levered position, which is a key rating factor.

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