S&P rates Gregg Appliances notes B

Standard & Poor's said it assigned its B corporate credit rating to Gregg Appliances Inc. The outlook is stable. Also, a B rating was assigned to the company's proposed $165 million senior unsecured notes due 2013.

Proceeds from the note issuance will be used to pay for the acquisition of Gregg Appliances Inc. and cover fees and expenses.

S&P said the ratings reflect Gregg's high debt leverage, relatively small store base, participation in a highly competitive industry and the inherent risks associated with the company's geographic expansion plans.

After the transaction, total lease-adjusted debt to EBITDA will be high, at 5.9x.

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