S&P affirms Amscan

Standard & Poor's said it affirmed all of its ratings on Amscan Holdings Inc., including the B corporate credit rating and removed the ratings from CreditWatch, where they were placed with negative implications on Sept. 18.

The CreditWatch placement followed the announcement that Amscan would acquire Factory Card & Party Outlet for about $72 million, including the assumption of Factory Card's outstanding debt, the agency noted.

The outlook is negative.

S&P added that the acquisition was financed with about $83 million of borrowings under the company's recently upsized $250 million asset-based revolving credit facility, stating that the ratings on Amscan reflect its high debt leverage, narrow business focus and participation in the highly competitive and fragmented party goods industry.

Partially mitigating these factors is the company's market-leading presence in the niche party goods industry and the industry's relatively recession-resistant characteristics, S&P said.

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