S&P rates Targus loan B, notes CCC+

Standard & Poor's said it assigned a B rating with a recovery rating of 2 to the Targus Group International Inc.'s proposed $205 million senior secured credit facility, a CCC+ rating to its proposed $150 million senior subordinated note offering due 2013 and a B corporate credit rating.

The outlook is stable.

Fenway Partners, the financial sponsor, will acquire Targus for $422 million, the agency said. Proceeds from the new credit facility and subordinated note issuance will be used to finance the acquisition of the company, and Fenway will also make a $106.7 million common equity contribution to help fund the transaction.

The ratings reflect the company's highly leveraged pro forma capital structure, the highly competitive operating environment and price-sensitive nature of the laptop case and accessory business, technology risk within the accessories product line, some customer concentration across the three distribution channels and vulnerability to weak economic and retail environments, the agency said.

S&P also said these risks are somewhat mitigated by the company's leading market share in laptop cases and certain computer accessories and favorable trends relating to growth in laptop sales.

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