S&P rates iPayment notes CCC+, loans B

Standard & Poor's said it assigned a B corporate credit rating to iPayment Inc., a CCC+ subordinated debt rating to the company's proposed $285 million in notes and B ratings with recovery ratings of 2 the company's $50 million six-year revolving credit facility and $450 million seven-year term loan. The outlook is stable.

Proceeds will be used to fund a management buyout of the company for about $800 million and refinance existing debt. Pro forma debt to EBITDA will be about 7x.

S&P said the ratings reflect the company's narrow product portfolio, short operating history at its current level, significant reliance on outsourcing for key functions and high leverage.

These factors are partly offset by the company's niche market position in the very large and competitive credit card processing industry and expected moderate cash flow, the agency said.

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