S&P assigns Knoll loan BB-, view positive

Standard & Poor's said it assigned its BB- rating and its 3 recovery rating to Knoll Inc.'s proposed $450 million senior secured credit facilities.

At the same time, S&P said it revised its outlook on Knoll to positive from stable.

In addition, S&P said it affirmed its BB- corporate credit rating on Knoll and its existing senior secured bank loan and 4 recovery ratings on Knoll's existing senior secured credit facilities.

The outlook revision reflects Knoll's improved operating performance through the first half of 2005 and meaningful debt reduction since the company's August 2004 debt-financed dividend, as well as expectations for further improvement and debt repayment, the agency noted.

S&P said the ratings on Knoll reflect its narrow business focus, the competitive and volatile nature of the office furniture industry and its leveraged financial profile.

These factors are somewhat mitigated by Knoll's defendable industry position given its large installed base and by the company's variable cost structure and strong reputation for design, the agency added.

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