S&P rates new Weight Watchers facility BB

Standard & Poor's said it assigned its BB bank loan rating and its recovery rating of 3 to commercial weight-loss service provider Weight Watchers International Inc.'s proposed $500 million senior secured credit facilities due 2010.

At the same time, S&P affirmed its outstanding ratings, including its BB corporate credit rating and B+ senior subordinated debt rating.

The outlook is stable.

Proceeds from the new credit facilities will be used to refinance the company's existing senior secured bank debt. The new facilities comprise a $250 million five-year revolving credit facility maturing 2009 and a $250 million six-year term loan B facility maturing 2010.

S&P said the ratings on Weight Watchers reflect the company's narrow business focus, participation in the highly competitive weight-loss industry, and substantial debt levels.

These factors are somewhat mitigated by the company's leading market position, geographic diversity, predictable cash flows, and favorable demographic trends.

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