S&P assigns Kinetic loan BB-

Standard & Poor's said it assigned a BB- senior secured issue-level rating and 1 recovery rating on Kinetic Concepts Inc.'s $325 million senior secured first-lien term loan C maturing in 2016. The 1 recovery rating reflects S&P's expectation for very high recovery for first-lien senior secured lenders in the event of a payment default, the agency said.

Despite some changes in the company's new capital structure since Kinetic Concepts' initial proposal and ratings, all of S&P's ratings remain unchanged.

The company's BB+ corporate credit rating is on CreditWatch with negative implications. S&P said it originally placed the company's corporate credit rating on CreditWatch negative on July 8 following reports that that the company may be subject to a takeover by a private-equity firm.

Following the completion of the proposed LBO, S&P said it expects to remove its corporate credit rating on Kinetic Concepts from CreditWatch and lower it to B from BB+, reflecting increased debt leverage and low cash flow relative to LBO-related debt. At the same time, S&P said it expects to assign a stable outlook.

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