S&P rates Dollarama floaters B-

Standard & Poor's said it assigned its B- rating to the $200 million new senior floating-rate deferred interest notes due Aug. 15, 2012 of Dollarama Group Holdings LP and Dollarama Group Holdings

Corp.

At the same time, the B+ corporate credit and bank loan ratings and B- subordinated debt rating on the issuer were affirmed, S&P said, noting that the 3 recovery rating on the bank loans also was affirmed.

The outlook is negative.

The agency added that the B- ratings on the new subordinated notes, as well as those on Dollarama Group's existing senior subordinated notes, are two notches below the long-term corporate credit rating as the notes are disadvantaged by the large portion of secured debt in the capital structure, relative to Dollarama's total assets.

Proceeds from the new notes will be used to fund a shareholder distribution, repay certain amounts owing to certain shareholders, and pay related fees and expenses, S&P said.

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