S&P upgrades Dollar General

Standard & Poor's said it raised the issue-level rating on Dollar General Corp.'s existing senior unsecured notes to BBB- from BB+.

The upgrade reflects the repayment and release of collateral after the company refinanced secured debt with unsecured debt. Dollar General recently issued a $1 billion unsecured term loan due 2018, a $400 million 1.875% unsecured notes due 2018 and a $900 million 3.25% unsecured notes due 2023, and used the aggregate proceeds to refinance its existing secured term loans and borrowings under its revolving credit facility.

At the same time, S&P withdrew the ratings on the existing $1,084,000,000 term loan B due 2014 and $880 million term loan C due 2017.

The agency also affirmed its BBB- corporate credit rating. The outlook is stable.

"The ratings on Goodlettsville Tenn.-based Dollar General Corp. reflect Standard & Poor's Ratings Services' expectation that this leading dollar store chain (about 1.5x the size of its next competitor Family Dollar in terms of revenue) will maintain credit protection measures in line with its "intermediate" financial risk profile, and that its strong market position will continue to support its "satisfactory" business risk profile," S&P credit analyst Ana Lai said in a news release.

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