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Published on 6/18/2012 in the Prospect News Bank Loan Daily.

S&P: Smart Balance loan B+

Standard & Poor's said it assigned its B+ corporate credit rating to Smart Balance Inc. The outlook is stable.

The agency said it also assigned a B+ issue-level rating to Smart Balance's proposed $280 million senior secured credit facility. The recovery rating on this debt is 3, indicating an expectation for meaningful recovery in the event of a payment default.

S&P said the ratings on Smart Balance reflect its view that it has an aggressive financial risk profile and a vulnerable business risk profile. Key credit factors in the business risk assessment include the company's narrow product focus, customer and supplier concentration and small size relative to its financially stronger and larger competitors.

The agency said the financial profile primarily reflects credit measures following the debt-financed acquisition of Udi's that are estimated to be in line with the indicative ratios for an aggressive financial risk profile.


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