S&P cuts Dollar General, rates loan B+

Standard & Poor's said it lowered its ratings on Dollar General Corp., including the corporate credit rating to B from BB+.

The ratings were removed from CreditWatch, S&P said.

The outlook is negative.

At the same time, S&P said it assigned a B+ rating to the company's planned $2.43 billion term loan B due 2014, adding that this rating and the 2 recovery rating indicate its expectation for a substantial recovery in the event of payment default.

The agency noted that it also assigned CCC+ ratings to the company's planned $1.35 billion senior unsecured notes due 2015 and its $550 million senior subordinated notes due 2017.

The ratings on Dollar General reflect its very highly leveraged capital structure, recent execution difficulties that have resulted in falling operating margins and the company's participation in the highly competitive discount retail environment, according to the agency.

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