S&P rates Renaissance Learning loans B+, CCC+

Standard & Poor's said it affirmed its corporate credit rating on Renaissance Learning Inc.

The outlook on the company remains stable.

S&P also assigned a B+ issue-level rating to Renaissance Learning's $330 million senior secured credit facilities, which consist of a $20 million revolver due 2018 and a $310 million first-lien term loan facility due 2020. The recovery rating on this debt is 2, indicating expectations of substantial (70% to 90%) recovery in the event of payment default.

Additionally, S&P assigned a CCC+ issue-level rating to the company's $120 million senior secured second-lien term loan facility due 2021. The recovery rating on the debt is 6, indicating expectations of negligible (0% to 10%) recovery in the event of a payment default.

"The ratings on Renaissance Learning Inc. reflect its modest position in a highly fragmented and niche overall instruction materials market, federal and state government budget pressures, and its high financial leverage, with debt to EBITDA of 7x at close of the dividend recapitalization transaction, up from 4.8x as of June 30, 2013," said S&P credit analyst David Tsui in a news release.

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