S&P: Cumberland Farms notes B

S&P said it assigned a B+ corporate credit rating to Cumberland Farms Inc.

The outlook is stable.

The agency also said it assigned a B rating to the company's proposed $300 million senior unsecured notes due 2025 with a recovery rating of 5, indicating 10% to 30% expected default recovery.

The company's capital structure also will include a $500 million revolving credit facility due 2022 that are not rated, S&P said.

The proceeds will be used to repay revolver borrowings and fund capital requirements for new store openings and remodeling existing stores, the agency said.

The ratings reflect a view of Cumberland's modest presence in the convenience store and fuel retailing industry, which is highly competitive and fragmented, S&P said.

The company intends to invest significantly in expanding its existing store base over the next few years, which will consume a sizable amount of capital, the agency said.

This has inherent risk, but management's track record bodes reasonably well for satisfactory execution, S&P added.

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