S&P lowers Oriental Trading, rates loans B, CCC+

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

The outlook is negative.

All ratings are removed from CreditWatch, where they were placed on June 14, with negative implications, the agency said.

At the same time, S&P said it assigned bank loan and recovery ratings to Oriental Trading Co. Inc.'s $640 million bank financing, comprised of a $410 million seven-year first-lien term loan, a $50 million six-year first-lien revolving credit facility and a $180 million 71/2-year second-lien term loan.

The first-lien loans are rated B, the same as the corporate credit rating, with recovery ratings of 2, the agency said, adding that the second-lien term loan is rated CCC+ with a recovery rating of 5.

S&P added that the ratings on OTC reflect its highly leveraged capital structure, thin cash flow protection measures, as well as the company's participation in the highly competitive and fragmented toys, novelties, party supplies and home decor retailing industry and its modest size.

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