S&P upgrades Atkins, loans

Standard & Poor's said raised its corporate credit rating on Atkins Nutritionals Holdings II Inc. to B from B-.

The outlook is stable.

At the same time, the agency raised its issue-level ratings on Atkins' $255 million first-lien term loan due 2019 and $20 million first lien revolver due 2018 to B+ (one notch above the corporate credit rating) from B-. The recovery rating was revised to 2, indicating the belief that lenders could expect substantial (70%-90%) recovery, in the lower half of the range, in the event of payment default, from 3.

S&P also raised the issue-level rating on the $100 million second-lien term loan due 2019 to CCC+ from CCC. The recovery rating remains 6, indicating an expectation for negligible (0% to 10%) recovery in the event of a payment default.

The one-notch upgrade reflects Atkins' improved performance and product diversification and S&P’s revised view that the company competes within the broader health and wellness categories, as compared with only the diet and low-carbohydrate categories.

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