S&P: Oriental Trading view negative

Standard & Poor's said it revised the outlook on Oriental Trading Co. Inc. to negative from stable and affirmed the B- corporate credit rating.

S&P said the outlook revision reflects continued deterioration of operating performance and concern that the company might violate financial covenants over the next few quarters if negative operating trends persist.

Ratings reflect the company's participation in a highly competitive and fragmented industry, leveraged capital structure, thin cash flow protection measures and narrow cushion to the financial covenants, the agency said.

Debt leverage rose to 7.5 times from 7 times because of EBITDA erosion and additional debt resulting from paid-in-kind accretion of interest on a mezzanine loan, the agency said.

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