S&P drops Oriental Trading

Standard & Poor's said it lowered its ratings on Oriental Trading Co. Inc., including its corporate credit rating to B- from B.

The outlook is stable.

According to the agency, the downgrade reflects the company's weaker-than-expected operating performance and credit protection measures.

Following the company's leveraged buyout by Carlyle Group in July 2006, leverage increased to about 7x, the agency said, adding that it had expected leverage to decline from improved operating performance and debt reduction.

However, the impact of higher-than-expected postage rate increases in 2007 and additional costs incurred with the implementation of the new fulfillment center have had a negative impact on EBITDA, the agency noted.

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