S&P gives Kinetic Concepts loan BBB-

Standard & Poor's said it assigned its bank loan and recovery ratings to Kinetic Concepts Inc.'s proposed $500 million revolving credit facility maturing 2012.

The agency said that this senior secured debt is rated BBB- with a recovery rating of 1, indicating the expectation for very high recovery in the event of a payment default.

At the same time, S&P said it affirmed its BB corporate credit rating on Kinetic Concepts.

The outlook remains stable.

According to the agency, the rating on Kinetic Concepts reflects the company's significant dependence on its vacuum assisted closure device for hard-to-heal wounds, which makes it subject to competitive technological developments and potential third-party pricing pressure on its VAC device.

These concerns are partially offset by the strong sales momentum and cash flow related to the VAC device, the potential for future product diversification through moderate-sized acquisitions and the company's willingness to maintain a conservative financial profile, the agency noted.

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