S&P rates Pegasus loans B

Standard & Poor's said it assigned a B corporate credit rating to Pegasus Solutions Inc. and a B rating with a recovery rating of 3 to the company's proposed $110 million senior secured term loan and its $10 million revolving credit facility. The outlook is stable.

Proceeds, in conjunction with existing cash and equity from the sponsor and management, will be used to fund the acquisition of Pegasus Solutions by Pride Capital, a private equity company, for $275 million.

S&P said the ratings reflects the company's narrow business profile, an increasingly competitive market place and high leverage. These factors partly are offset by a leading position in a growing niche market and solid EBITDA margins.

Pro forma for Dec. 31, Pegasus's adjusted debt to EBITDA was 4.9x.

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