Moody's rates Orchard Supply notes B2

Moody's Investors Service said it assigned a B1 corporate family rating to Orchard Supply Hardware LLC and a B2 rating to Orchard Supply Hardware's $235 million senior unsecured notes maturing 2013.

The outlook is stable.

The B1 corporate family rating considers the leveraged nature of Orchard's expected balance sheet, the present competitive landscape it faces in its predominantly California market, competition which is expected to heighten as Lowe's and Home Depot continue to expand in California, plus the lack of any tangible support from its ultimate parent, Sears Holdings, Moody's said.

The rating is supported by the company's solid historical operating performance despite myriad executive changes as a result of its ownership by Sears, the solid, mostly hardware niche it occupies in its market, its ability to sell the highly regarded Craftsman line of hand and power tools and its expected ability, even with this increased debt, to generate free cash flow, Moody's said.

© 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.