S&P gives Edcon B+, notes B+, B-

Standard & Poor's said it assigned its B+ long-term corporate credit rating to Edcon Holdings (Proprietary) Ltd.

The outlook is stable.

At the same time, S&P said it assigned its B+ senior secured debt rating to the proposed €1.18 billion floating-rate notes to be issued by related entity Edcon (Proprietary) Ltd., with a recovery rating of 2, the agency said.

Edcon's proposed €650 million senior unsecured notes have been assigned an issue rating of B-, two notches below the corporate credit rating, S&P added.

The proceeds from the notes will be used to refinance bridging bank debt used by Edcon's new owner to part finance its acquisition of the group's assets and business, the agency said.

According to S&P, the ratings reflect the company's highly leveraged financial profile on completion of the LBO while the ratings are further constrained by Edcon's lack of geographical diversity and by the seasonality of the apparel retail industry and the discretionary nature of clothing and footwear purchases, which expose the company's operating earnings to volatility.

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