Moody’s upgrades Ollie’s

Moody's Investors Service said it upgraded Ollie's Holdings, Inc.'s corporate family rating to Ba3 from B2 following its initial public offering and repayment of $153 million of debt using the proceeds from the IPO.

At the same time the agency upgraded the company’s probability of default rating to Ba3-PD from B2-PD and the rating on its senior secured term loan to Ba3 from B2. Moody's also assigned a speculative grade liquidity rating of SGL-2.

The outlook is stable.

Moody’s said the Ba3 corporate family rating reflects Ollie's moderate leverage and good interest coverage with debt/EBITDA and EBITA/interest after the repayment of debt using $153 million in IPO proceeds (incorporating Moody's standard analytical adjustments for leases) of around 3.6 times and about 3 times, respectively, from pre-IPO levels of about 5 times and 2.5 times, respectively. The agency expects credit metrics to demonstrate modest improvement in the next 12-18 months.

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