S&P affirms Ollie's on add-on

Standard & Poor's said it affirmed the B rating on Ollie's Holdings Inc.'s and wholly owned subsidiary Ollie's Bargain Outlet Inc.'s existing term loan due 2019.

The 4 recovery rating is unchanged.

The company has issued a $50 million add-on term loan to its existing $225 million term loan.

S&P also said it affirmed the Ollie's Holdings' B corporate credit rating.

The outlook remains stable.

The proceeds will be used to redeem shares held by its equity sponsor, CCMP Capital Advisors, the agency said.

The speculative-grade rating reflects the company's weak business risk profile and highly leveraged financial risk profile, S&P said.

The company is a smaller, regional player in a highly competitive and fragmented close-out industry, the agency said.

The company also is expected to pursue a high-growth strategy over the next year, but should maintain good profitability, S&P said.

But, Ollie's generates good profitability relative to its peers due to the lower mix of low-margin consumables and maintains a relatively stable gross margin, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.