S&P: Merrill loans B+, B-, CCC

Standard & Poor's said it placed its CCC- corporate credit rating on Merrill Corp. on CreditWatch with positive implications.

At the same time, the agency said it assigned the company's proposed $30 million revolving credit facility due 2017 a preliminary B+ issue-level rating with a recovery rating of 1, indicating an expectation for very high recovery in the event of a payment default.

The agency said it also assigned its $455 million first-lien term loan due 2017 a preliminary B- issue-level rating with a recovery rating of 3 and assigned its $150 million senior secured second-lien notes due 2018 a preliminary CCC issue-level rating with a recovery rating of 6.

S&P said the CreditWatch placement is based on the announcement that the company plans to refinance its revolving credit facility due 2012, $374 million first-lien term loan due December 2012 and $219 second-lien notes due November 2013.

"We could raise the corporate credit rating to B- if Merrill Corp. completes the proposed refinancing transaction at the expected pricing levels with a covenant cushion of at least 20%," said S&P credit analyst Chris Valentine in a news release.

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