S&P rates Knoll loan BB-

Standard & Poor's assigned a BB- senior secured bank loan rating and a recovery rating of 4 to Knoll Inc.'s proposed $500 million bank facility and lowered its corporate credit and bank loan ratings on Knoll Inc. to BB- from BB following the company's proposal of a debt refinancing and a shareholder dividend.

The outlook is stable.

The ratings reflect Knoll's high pro forma debt leverage, recently lower profitability and the volatile nature of the office furniture industry, S&P said. These factors are mitigated by Knoll's defendable industry position, given its large installed base, as well as by the company's variable cost structure and strong reputation for design.

Knoll's pro forma total debt to EBITDA for the 12 months ended June 30, adjusted for operating leases and other liabilities, was about 5.0x, compared with a current figure of about 4.3x.

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