S&P rates Orchard Supply notes CCC+

Standard & Poor's said it assigned its B corporate credit rating to Orchard Supply Hardware Stores Corp. The outlook is stable.

S&P said it also assigned a CCC+ rating to the company's planned $235 million unsecured notes.

The ratings reflect the company's small size in the highly competitive home improvement industry, its regional concentration, seasonality and a highly leveraged capital structure, S&P said.

With 84 stores in California and about $865 million in revenue, the company maintains a very small market position in the highly competitive home improvement industry, S&P said.

Still, Orchard is able to compete effectively because it offers a significantly broader and deeper merchandise selection in certain categories than its competitors, provides better customer service than large warehouse home centers and is competitively priced compared with independent or local hardware retailers, S&P said.

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