S&P: Kinetic Concepts loan BB-

Standard & Poor's said it assigned a BB- rating and 1 recovery rating to Kinetic Concepts Inc.'s incremental $350 million first-lien term loan D-1.

The 1 recovery rating on the first-lien debt reflects an expectation for 90% to 100% expected default recovery.

The company will use proceeds of the transaction and cash on the balance sheet to fund its acquisition of wound care and wound-dressings products manufacturer, Systagenix, S&P said.

The agency also said it lowered the rating on the company's second-lien debt to B- from B and revised the recovery rating on that issue to 5 from 4. The 5 recovery rating on the second-lien debt reflects 10% to 30% expected default recovery.

Although the agency said it increased the estimated default-level valuation slightly, reflecting the proposed acquisition of Systagenix, the additional first-lien debt reduces the recovery prospects on the second-lien debt.

The B corporate credit rating is unchanged.

The acquisition modestly improves product diversity, S&P said, but the company's fair business risk profile reflects its still significant dependence on vacuum-assisted closure devices.

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