S&P cuts Leslie's Poolmart

Standard & Poor's said it lowered Leslie's Poolmart Inc.'s corporate credit rating to B from B+ and its $170 million 7.75% senior unsecured notes to B- from B.

The agency also downgraded the local-currency rating to B- from B.

The outlook is negative.

S&P said the downgrade reflects the substantial increase in debt leverage from the issuance of $310 million of notes at Leslie's Holdings Inc., the parent company. The debt-to-EBITDA ratio increased to 6.9 times at the end of the company's third quarter from 3.8 times at fiscal year-end September 2006.

The ratings reflects the company's participation in the relatively small and fragmented pool-supply business, the highly seasonal nature of its business that is vulnerable to unfavorable weather conditions and its highly leveraged capital structure, the agency said.

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