Moody's rates Knoll loans Ba3

Moody's Investors Service said it rated Knoll Inc.'s new $75 million revolving credit facility and $425 million senior secured term loan due 2011 at Ba3 following the company's announcement of a leveraged recapitalization and downgraded Knoll's senior implied rating to Ba3 and senior unsecured issuer rating to B1.

The outlook is stable.

The ratings reflect the severe market downturn in commercial furniture in general and commercial office systems in particular over the last few years which has led to significant erosion in sales, earnings, cash flow and credit metrics for commercial furniture manufacturers, Moody's said.

The ratings also reflect Knoll's strong brand name, its diversified customer and distributor base, its good market position in its core office systems business and its long-standing reputation for product quality, design and innovation.

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