S&P rates ReAble loans BB-, notes CCC+

Standard & Poor's said it affirmed the B corporate credit rating on ReAble Therapeutics Inc. despite added debt and integration risks associated with its proposed acquisition of DJO Inc.

S&P also assigned BB- ratings to the proposed $100 million senior secured revolving credit facility due 2013 and $1.055 billion term loan B due 2014.

The agency also assigned a CCC+ unsecured debt rating to ReAble Therapeutics Finance's proposed $575 million senior unsecured notes due 2015 and affirmed the CCC+ subordinated debt rating on its existing $200 million senior subordinated notes due 2014.

The outlook is stable.

Proceeds will be used to fund the $1.5 billion purchase of DJO.

According to S&P, the ratings reflect the company's large debt burden and associated interest expense as well as the challenge of integrating the two companies and achieving cost synergies.

These concerns are offset partially by ReAble's established position in its niche orthopedic device markets, improved product and customer diversity, long-standing customer relationships and a respectable record of new product development and enhancements, the agency said.

Excluding expected cost synergies, the issuer's total lease-adjusted debt-to-EBITDA ratio is expected to be 10 times. Including the synergies, the ratio is expected to be about 7 times.

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