S&P rates ClubCorp, notes B+, loans BB

Standard & Poor's said it assigned a B+ corporate credit rating to ClubCorp Club Operations, Inc., along with a BB rating on its $360 million senior secured credit facilities with a recovery rating of 1, indicating 90% to 100% recovery in a default.

The facilities consist of a $50 million senior secured revolving credit facility due 2015 and a $310 million senior secured term loan due 2016.

The agency also said it assigned a B+ rating on its $415 million senior notes due 2018 with a recovery rating of 4, indicating 30% to 50% recovery in a default.

The outlook is stable.

The proceeds will be used to refinance its existing indebtedness.

In connection with the transaction, a substantial portion of the debt in ClubCorp's previous capital structure was forgiven by lenders, the agency said. This has the potential to create certain tax obligations over the longer term, although any potential tax burdens do not have a meaningful impact on ratings at this point, S&P said.

The ratings reflect the company's high debt leverage, historically aggressive financial policy and vulnerable business clubs segment, which contributed about 26% of the company's revenue in 2009, the agency said.

These factors are somewhat tempered by the company's relatively stable golf business, which is supported by a strong customer demographic, historically high retention rates and a diverse network of properties that would be difficult to replicate, creating meaningful barriers to entry in the markets in which ClubCorp operates, S&P said.

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