S&P: On Assignment loan BB-

Standard & Poor's said its existing preliminary ratings for On Assignment Inc. are unaffected by the addition of a $100 million term loan A, an increase in the size of its revolving credit to $75 million from $50 million and a reduction in the amount of its term loan B to $365 million from $490 million.

The agency said it assigned its preliminary BB- rating to the company's $100 million term loan A due 2017 with a preliminary recovery rating of 3. The 3 recovery rating indicates an expectation of meaningful recovery for lenders in the event of a payment default.

S&P said it expects On Assignment to use the net proceeds and newly issued common stock to pay for its $600 million acquisition of Apex Systems Inc., and to refinance its existing debt.

The agency said the preliminary BB- rating reflects its expectation that On Assignment will be able to reduce leverage, generate positive discretionary cash flow and maintain an adequate cushion of covenant compliance over the intermediate term.

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