S&P drops Gymboree loan, rates notes B-

Standard & Poor's said it lowered its preliminary senior secured debt rating on the Gymboree Corp.'s $820 million term loan to B+ from BB- and revised the preliminary recovery rating on the loan to 3 from 2.

According to the agency, this action follows the company upsizing its senior secured credit facility by $100 million.

Concurrently, the agency said it assigned its preliminary B- issue-level rating, with a preliminary 6 recovery rating, to the company's proposed $400 million of senior unsecured notes.

S&P stated that it also affirmed its preliminary B+ corporate credit rating on Gymboree. The outlook is stable.

The company intends to use the proceeds from the debt issuance and an about $524 million equity contribution to fund acquisition of the company by Bain Capital LLC, the agency added.

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