S&P assigns Kronos B, loans B, CCC+

Standard & Poor's said it assigned its B corporate credit rating to Kronos Inc.

The outlook is stable.

"At the same time, we assigned our B bank loan rating and 3 recovery rating to the company's proposed $725 million first priority senior secured bank facility, which will consist of a $665 million term loan due 2014 and a $60 million revolving credit facility due 2013, indicating that lenders can expect meaningful (50%-80%) recovery of principal in the event of payment default," said S&P credit analyst David Tsui.

The agency added that it assigned its CCC+ bank loan rating, with a recovery rating of 5 to the proposed $390 million second priority term loan due 2015, indicating that lenders can expect a negligible recovery of principal in the event of a payment default.

Proceeds from the first- and second-lien term loans, totaling $1,055 million, along with $720 million of equity from sponsors and $102 million of cash on hand will be used to fund the purchase of Kronos, the agency noted.

S&P said that the ratings on Kronos reflect the company's focus on a niche segment in the human capital management market and very high leverage while these factors partly are offset by Kronos' good historical track record in the workforce management solutions market and predictable revenue generation.

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