S&P gives Mitchell loan B+, view up to positive

Standard & Poor's said it revised its outlook on Mitchell International Inc. to positive from stable.

At the same time, S&P said it affirmed its B+ corporate credit rating.

S&P said it also assigned its B+ rating, with a recovery rating of 3, to Mitchell's proposed $145 million senior secured bank facility, which will consist of a $10 million revolving credit facility due 2010 and a $135 million term loan due 2012.

S&P said the ratings on Mitchell reflect its narrow product focus within a niche marketplace, customer concentrations and high debt leverage, adding these are only partly offset by a largely recurring revenue base supported by intermediate-term customer contracts, high barriers to entry and solid operating margins, allowing for modest free operating cash flow generation.

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