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S&P: Kinetic Concepts notes B-, CCC-
S&P said it assigned a B- rating to Kinetic Concepts Inc.'s proposed issuance of $1.75 billion of five-year senior secured second-lien notes to repay existing $1.75 billion senior secured second-lien notes due 2018.
KCI USA Inc. is a co-issuer of the notes, S&P said.
The agency also said it assigned a recovery rating of 5 to these notes, reflecting 10% to 30% expected default recovery.
The company is refinancing $450 million of its $612 million senior unsecured notes due 2019 with new senior secured third-lien notes due in 2021.
The agency also said it assigned an issue-level rating of CCC+ and recovery rating of 6 to the third-lien notes, which indicates 0 to 10% expected default recovery.
The B corporate credit rating on Kinetic Concepts reflects its fair business risk and highly leveraged financial risk profile, S&P said.
The outlook is stable.
The ratings also consider the company’s significant product concentration, pricing pressure within its advanced wound therapeutics product categories and limited geographic diversity with roughly 75% of revenues derived in the Americas, the agency said.
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