Moody's: Dollar General outlook positive

Moody's Investors Service said it changed Dollar General Corp.'s outlook to positive from stable and affirmed its ratings, including the B2 corporate family and probability-of-default ratings, Ba3 (LGD3, 32%) $1.7 billion first-out term loan, B1 (LGD4, 56%) $600 million first-loss term loan, B3 (LGD5, 76%) $1.18 billion senior unsecured notes, Caa1 (LGD6, 93%) $656 million senior subordinated notes and SGL-1 speculative-grade liquidity rating.

The agency said the change in outlook was prompted by Dollar General's announcement that it intends to proceed with an initial public offering of common stock and to use the proceeds to repay existing debt. It also reflects Moody's expectation that Dollar General's earning will continue to improve, leading to a strengthening of credit metrics.

Dollar General's B2 corporate family rating balances its modestly leveraged capital structure, the agency's expectation that the company will continue to perform solidly through the challenging economic environment and its aggressive financial policies, Moody's said.

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