S&P rates Chem Rx loans B+, CCC+

Standard & Poor's said it assigned a B corporate credit rating to Chem Rx Corp., B+ ratings with recovery ratings of 2 to the company's proposed $25 million senior secured first-lien revolver due 2012 and $90 million senior secured first-lien term loan due 2013 and a CCC+ rating with a recovery rating of 6 to its proposed $42 million senior secured second-lien term loan due 2014.

The outlook is stable.

The loan ratings assume that the proposed acquisition of the company by Paramount Acquisition Corp. will be approved by 80% of shareholders. The agency said 100% approval would increase the equity investment in Chem Rx and reduce the company's second-lien term loan borrowings by about $11 million.

S&P said the ratings reflect the company's narrow business focus, its relatively small scale, its regional concentration in the state of New York, the potential for reimbursement and pricing pressures and its high debt leverage.

These concerns are partially mitigated by the company's solid position in its markets, its high customer retention and opportunities to continue its consistent growth trend, the agency said.

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