S&P lifts American Greetings loans & notes

Standard & Poor's said it affirmed its B+ corporate credit rating on American Greetings Corp.

The outlook is stable.

At the same time, the agency affirmed the B- issue-level rating on the company's $285 million holding company payment-in-kind notes due 2019. The recovery rating remains 6.

The agency also raised the rating on the senior secured credit facility (which consists of a $250 million revolving credit facility due 2018 and a $350 million term loan due 2019) to BB from BB-. The recovery rating was revised to 1 from 2.

In addition, S&P raised the rating on the senior unsecured notes due 2021 to B from B-. The recovery rating was revised 5 from 6.

S&P said the ratings reflect its view of American Greetings’ "weak" business risk profile and "aggressive" financial risk profile.

"We expect the company's credit measures to remain relatively flat following the transaction, and to weaken slightly over the next 12 months following entry into a construction loan to build a new company headquarters," S&P credit analyst Stephanie Harter said in a news release.

"Despite the potential slight increase in leverage over the near term, we expect American Greetings to sustain leverage below 5x and for funds from operations-to-total debt to improve closer to 15% over the next two years."

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