Moody's rates GSCP loans B1

Moody's Investors Service said it assigned a B1 rating to the senior secured credit facilities of GSCP (NJ) LP, which include a $120 million senior secured term loan due in 2012 and a $20 million 5-year senior secured revolving facility.

The outlook is stable.

Proceeds will be used to refinance GSC Partners' existing obligations by redeeming a portion of its series A and B preferred partnership interests, as well as to pay a portion of distributions to shareholders and GSCP principals, fund general corporate purposes and pay fees and commissions associated with the transaction.

Moody's said the rating reflects GSCP (NJ)'s strong management team and good competitive position within the private equity sector, coupled with healthy demand in the market for alternative investments as an asset class. GSCP (NJ) currently has $9 billion in assets under management, and its reputation and historical performance in terms of return on assets and investment profit realizations should enable the entity to continue to raise new funds over time.

The rating also incorporates a number of risks to GSCP (NJ)'s business and cash flows: the proposed financing and concurrent recapitalization will add significant leverage to the company's balance sheet and the firm's ratio of adjusted debt to EBITDA is expected to increase to more than 5x following the transaction's close, which the agency said is well in excess of the typical range for asset managers.

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