S&P assigns Orbimage floaters CCC+

Standard & Poor's said it assigned its CCC+ rating was assigned to Orbimage Holdings Inc.'s proposed $245 million senior secured floating-rate notes due 2012 as well as a B- corporate credit rating to the company and its subsidiary Orbimage Inc.

The outlook is negative.

At the same time, the CCC+ rating was placed on CreditWatch with positive

Implications, S&P said.

The CreditWatch listing reflects the potential guarantee of the new notes by Orbimage Inc. if the existing $62.8 million senior subordinated notes due 2008 are redeemed using proceeds from the new offering as planned by the company on or before July 7, the agency noted.

If the senior subordinated notes are redeemed and the guarantee provided, the agency said the rating on the senior secured floating-rate notes would be raised to B-.

The ratings on Orbimage reflect a high degree of business risk because of revenue concentration from a government contract, high debt leverage, weak near term cash flow, relatively small asset size and dependence on the successful launch of the new satellite, S&P noted, saying that somewhat tempering these factors are the rising demand for commercial satellite imagery services, the company's young satellite fleet and experienced management.

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