S&P lowers USI, rates loan B-, notes CCC

Standard & Poor's said it lowered its counterparty credit and senior debt ratings on USI Holdings Corp. to B- from BB- as a result of USI's announced $1.4 billion leveraged buyout by GS Capital Partners.

The ratings were then removed from CreditWatch with negative implications where they had been placed on Oct. 27, the agency noted.

The outlook is stable.

At the same time, S&P said it assigned its B- senior secured debt rating to USI's proposed $625 million senior secured credit facility, which consists of a $525 million term loan B and a $100 million revolver, assigned its CCC senior unsecured debt rating to USI's $225 million senior unsecured notes and its CCC subordinated debt rating to USI's $200 million subordinated notes.

The $1.4 billion proposed transaction will consist of $950 million in new debt and about $485 million in equity contribution from GS, the agency said.

According to S&P, the downgrade is in response to the proposed buyout, which will significantly increase USI's debt leverage on a pro forma basis to 67% at year-end 2007 from 46% at year-end 2006.

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