S&P rates American Tire Distributors notes B-, CCC+

Standard & Poor's said it assigned its B corporate credit rating to American Tire Distributors Inc., reflecting the company's heavy debt load, which more than offsets its leading niche market positions.

At the same time, S&P assigned a B- rating to the company's proposed $130 million senior floating-rate notes due 2012 and a CCC+ rating to its proposed $200 million senior subordinated notes due 2015. The outlook is stable.

Proceeds from the debt issues, combined with $165 million of borrowings under a new asset-based revolving credit facility and $210 million of sponsor equity, will be used to purchase American Tire Distributors and refinance its existing debt.

The company is being acquired for about 9x EBITDA by Investcorp SA.

S&P said the ratings reflect the company's narrow scope of operations and modest size, notwithstanding its niche market leadership position, highly leveraged capital structure and thin cash flow protection.

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