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S&P: Dollar General outlook positive
Standard & Poor's said it revised its outlook on Dollar General Corp. to positive from negative.
The company's corporate credit, bank loan rating and senior unsecured debt rating are all BB+.
The revision is based on a preliminary resolution of the Securities and Exchange Commission investigation into accounting changes. The ratings on the company, including the BB+ corporate credit rating, were affirmed.
During the fourth quarter of 2003, Dollar General reached an agreement in principle with the SEC to settle the investigation into accounting matters for $10 million. The agreement is subject to approval by the SEC and the court in which the SEC complaint is filed.
The investigation stemmed from the company's restatement of financial results for fiscal years 1998, 1999, and 2000. Although the restatement did not materially affect cash flow for the restated years, it pointed to inadequate financial controls, which have since been addressed by the financial management team installed following the restatement, S&P said.
S&P said the ratings on Dollar General reflect a highly competitive discount retail environment and risks associated with an aggressive expansion program, somewhat mitigated by a good market position and satisfactory cash flow protection.
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