S&P gives Fort Dearborn loan B

Standard & Poor's said it assigned its B rating and its recovery rating of 2 to Fort Dearborn Co.'s $175 million senior secured credit facilities.

The agency said that the senior secured facilities consist of $15 million of U.S. and $10 million of Canadian, revolving credit facilities, a $125 million U.S. term loan B and a $25 million Canadian term loan B, all maturing in 2012.

The B rating is one notch above the corporate credit rating, this and the 2 recovery rating indicate that lenders can expect a substantial recovery of principal in the event of a payment default, S&P said, noting that Fort Dearborn used proceeds from the recently completed facilities to purchase the assets of Renaissance Mark Holdings Corp. and to refinance existing debt.

The agency said it also affirmed the B- corporate credit rating on Fort Dearborn.

The outlook is stable.

According to S&P, the ratings reflect Fort Dearborn's vulnerable business risk profile incorporating its relatively narrow scope of operations in the highly fragmented labels segment of the packaging industry, meaningful customer concentration, risks associated with integrating a large acquisition and a highly leveraged financial profile.

These negatives are partially offset by a leading market position in the cut-and-stack label segment of the label market and long-standing relationships with key customers, the agency said.

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