S&P cuts Rent-A-Center notes, rates loan BB+

Standard & Poor's said it affirmed its BB corporate credit rating on Rent-A-Center Inc. and revised the outlook to negative from stable.

At the same time, the agency assigned a BB+ issue-level rating and a 2 recovery rating to the proposed $350 million senior secured term loan B. The 2 recovery rating indicates an expectation for substantial (70% to 90%) recovery of principal in the event of a payment default.

S&P also lowered the issue-level rating on the company's existing senior notes to B+ from BB- with a 6 recovery rating, indicating an expectation for negligible (0% to 10%) recovery.

The outlook is negative, reflecting the expectation that operating performance will continue to be soft for the next 12-24 months, primarily because of ongoing weak customer demand and intensified promotional environment.

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