S&P: Merisant on negative watch

Standard & Poor's said it placed its ratings on Merisant Worldwide Inc. (formerly Tabletop Holdings Inc.) and its wholly owned subsidiary Merisant Co. on CreditWatch with negative implications.

This includes Merisant Worldwide's B+ corporate credit and its B- senior subordinated debt ratings and Merisant Co.'s B+ corporate credit, B+ senior secured bank loan, and B- senior subordinated debt ratings.

S&P said the CreditWatch placement follows Merisant Worldwide's recent S-1 filing with the Securities and Exchange Commission (filed under Tabletop Holdings) for an initial public offering of income deposit securities, representing shares of its common stock and new senior subordinated notes. In connection with this offering, Merisant Worldwide is expected to begin a tender offer for all of its outstanding senior subordinated discount notes due 2014 and Merisant Co.'s senior subordinated notes due 2013 and to repay all outstanding borrowings on Merisant Co.'s senior secured credit facilities.

S&P said it believes that the IDS structure, in general, exhibits an extremely aggressive financial policy. Merisant Worldwide will have significantly reduced its financial flexibility given the anticipated high dividend payout rate. As a result, the structure limits the company's ability to weather potential operating challenges and also reduces the likelihood for future deleveraging.

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