S&P ups Floor & Décor

S&P said it raised its corporate credit rating on Floor & Decor Holdings Inc. to B+ from B. The outlook is positive.

In addition, S&P raised the issue-level rating on the partially repaid $174 million first-lien term loan to BB- from B. S&P revised the recovery rating to 2 from 4, indicating an expectation for substantial (70% to 90%; rounded estimate: 85%) recovery of principal in the event of a payment default.

S&P does not rate the $200 million asset-based lending revolver due 2021.

“The upgrade reflects our expectation for stronger EBITDA margins and profitability as FND continues to pursue its large-format, high SKU-count store base expansion focused on expanding ancillary services and acting as a wholesaler to its large (currently at about 60%) professional customer base. In our view, product mix tailoring to regional tastes with a focus on the latest styles at everyday low prices has been contributing to profitable new store openings,” said S&P credit analyst Olya Naumova in a news release.

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