S&P rates Empire, notes B

Standard & Poor's said that it assigned a B corporate credit rating to Empire Today LLC.

The outlook is stable.

S&P also assigned the company's $150 million of senior secured notes due 2017 a B issue rating with a 4 recovery rating, indicating the expectation for average (30%-50%) recovery in the event of a payment default.

The company used the net proceeds to repay existing debt, pay a dividend and pay various corporate expenses.

The ratings on Empire reflect the risks in the company's reliance on discretionary consumer spending for major home improvement projects and necessity of effective television advertising to generate customer leads, while offering a narrow product selection primarily in residential replacement flooring, S&P said.

The ratings also reflect an aggressive financial policy, substantial dividend activity, a vulnerable business risk profile and highly leveraged financial risk profile, the agency said.

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