S&P puts Krayton Polymers on developing watch

Standard & Poor's put Kraton Polymers LLC on CreditWatch developing including its $350 million senior secured bank loan at BB-.

S&P said the action follows the disclosure in trade press reports that majority owner Ripplewood Holdings LLC has engaged two investment banks to explore the sale of Kraton Polymers.

The sale process, led by CS First Boston and Morgan Stanley, is in the preliminary stages, but could be completed by year-end.

S&P rates Inamed loan BB-

Standard & Poor's assigned a BB- rating to Inamed Corp.'s $100 million credit facility and confirmed its corporate credit at BB-. The outlook is positive.

S&P said Inamed's ratings reflect its strong but narrow market position and S&P's concern that the company's operating performance may be affected by technological risks and market changes.

The recent U.S. approval of both CosmoDerm and CosmoPlast, Inamed's human collagen products, provides opportunities to expand the company's facial product franchise, S&P noted. Other promising products include the Lap Band weight-loss system and the company's silicone gel breast implants.

Still, Inamed's narrowly focused market position and its dependence on a single-product platform for more than 50% of revenues make it vulnerable to technological and market changes, S&P added. In addition, fluctuations in economic conditions, especially in the U.S., could influence the company's operating performance, as cosmetic procedures are usually elective and generally not reimbursable by a third party.

Both EBITDA coverage of interest and funds from operations to lease-adjusted debt are strong for the rating at 6.0x and 67%, respectively, and should improve with reduced interest costs resulting from the refinancing, S&P said. Moreover, Inamed has retired $19 million of debt during the third quarter of 2003.

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