S&P assigns Merrill Communications loan B-

Standard & Poor's said it assigned its B- bank loan rating and recovery rating of 5 to Merrill Communications LLC's proposed $200 million second-lien term loan facility.

Concurrently, S&P said it raised its recovery rating to 2 from 3 and affirmed its B+ bank loan rating for Merrill Communication's senior secured first-lien credit facility.

At the same time, S&P said it revised its outlook on parent Merrill Corp. to negative from stable and affirmed its B+ corporate credit rating.

The outlook revision reflects a more aggressive financial policy, which has resulted in increased debt leverage, according to the agency.

The second-lien credit facility consists of a seven-year, $200 million term loan, the agency said, adding that proceeds of this debt issuance are to be used to redeem all outstanding shares of preferred equity and to finance a one-time special dividend.

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