S&P changes Rent-A-Center to stable

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

At the same time, the agency affirmed the BB+ issue-level rating on the $225 million term loan. The recovery rating on this debt remains 2, indicating an expectation that lenders could expect substantial (70%-90%) recovery in the event of a payment default or bankruptcy. The recovery expectations are in the upper half of the 70% to 90% range.

S&P also affirmed the B+ issue-level ratings on Rent-A-Center’s $550 million of senior unsecured notes. The recovery rating remains 6, indicating an expectation for negligible (0% to 10%) recovery.

"The outlook revision and business risk profile reflect our view that Rent-A-Center will continue to improve performance in the coming year through strategic initiatives across its core U.S., Acceptance Now, and Mexico operations after a challenging 2014," S&P credit analyst Diya Iyer said in a news release.

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