S&P rates Ollie's loan B

Standard & Poor's said it assigned its B corporate credit rating to Ollie's Holdings Inc., the parent company of Ollie's Bargain Outlet Inc., and issuer of its $225 million term loan. The outlook is stable.

At the same time, the agency said it assigned a B issue-level rating with a 4 recovery rating to the company's $225 million term loan due 2019. The 4 recovery rating indicates an expectation for modest recovery of principal in the event of a payment default.

The agency said the speculative-grade rating on Ollie's Bargain Outlet reflects a weak business risk profile and a highly leveraged financial risk profile. The business risk profile is based on S&P's opinion that the company is a smaller regional player in a highly competitive and fragmented close-out industry.

"We also expect that the company will pursue a high-growth strategy over the next year, but should maintain good profitability," said S&P credit analyst Ana Lai in a news release.

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