S&P rates Champion loan B+

Standard & Poor's said it assigned its preliminary B+ rating and a 4 recovery rating to Champion Homebuilders Co.'s proposed $200 million senior secured credit facility.

Champion Home Builders Co. is a subsidiary of Champion Enterprises Inc. At the same time, the outlook assigned to both the parent and subsidiary was revised to positive.

Additionally, the B- rating assigned to Champion's 7.625% senior notes due 2009 was placed on CreditWatch with positive implications.

S&P said the rating actions follow the recent announcement that Champion intends to use the proceeds from the proposed secured credit facility to repay existing debt and improve liquidity. The outlook revision acknowledges Champion's successful divestiture of unproductive manufactured housing retail centers and management's renewed focus on its core manufacturing operations.

Champion intends to refinance its existing credit facility and its $88 million outstanding 11.25% senior notes due 2007 with a new $200 million senior secured credit facility. The proposed facility will consist of a $100 million term loan due 2012, which will be fully drawn at closing; a $60 million synthetic letter-of-credit facility due in 2012; and a $40 million revolving credit facility due 2010.

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