S&P cuts Michaels Stores to stable

Standard & Poor's said it revised its ratings outlook on Michaels Stores Inc. to stable from positive.

At the same time, the agency said that it affirmed all ratings on the company, including the B- corporate credit rating.

S&P said that the outlook revision reflects our projection that the company will not be able to achieve credit metrics appropriate for a higher rating category after a weaker-than-expected operating performance in the fourth quarter of fiscal 2007.

S&P said it previously anticipated that the company could reduce lease-adjusted leverage to the low-7x area by the end of fiscal 2008, given its strong operating trends up until the last quarter.

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