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S&P rates Rent-A-Center loan BB+
Standard & Poor's assigned its BB+ rating to Rent-A-Center Inc.'s proposed $600 million bank loan. A recovery rating of 2 was also assigned to the loan.
The proceeds will be used to refinance the company's existing bank loan.
S&P said the ratings on Rent-A-Center reflect the company's leading market position in the rent-to-own retail industry, moderate leverage and adequate liquidity. These strengths are partially offset by the highly competitive and fragmented nature of the industry, and challenges in continuing growth in the face of slowing same-store sales, S&P said.
The company remains only moderately leveraged, with lease-adjusted total debt to EBITDA of 2.2x and total debt to EBITDAR of 3.3x for the 12 months ended March 31.
Moody's affirmed Rent-A-Center's corporate credit rating at BB+ and its subordinated debt at BB-.
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