S&P rates Skill loan B+

Standard & Poor's said it assigned its B+ corporate credit rating to Cayman Island-based Skill Holdings LP and assigned its B+ bank loan rating as well as a recovery rating of 3 to Skill's $140 million senior secured credit facilities.

The outlook is stable.

S&P said proceeds from the term loan will be used to help finance the $249 million acquisition by American Capital Strategies Ltd. of a portion of ZS Cayman Holdings LP's stake in Sanda Kan Industrial Ltd. and Life-Like Products LLC. Skill, the holding company of Sanda Kan and Life-Like, is 50%-owned by American Capital Strategies and 50%-owned by ZS Cayman Holdings and management.

S&P said the ratings reflect Skill's high debt leverage, Life-Like's exposure to the competitive and fragmented U.S. foam products market, as well as the need to generate increasing discretionary cash flow over the intermediate term to service rising bank debt maturities.

These weaknesses are somewhat offset by Sanda Kan's niche position in the model train manufacturing market, consistent operating performance, and Skill's good discretionary cash flow generation.

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