S&P lifts Owens & Minor from junk

Standard & Poor's said it raised its corporate credit rating on Owens & Minor Inc. to BBB- from BB+. The outlook is stable.

At the same time, S&P raised its unsecured bank loan rating to BBB- from BB+ and the subordinated debt rating to BB+ from BB-.

The upgrade reflects S&P's increased confidence in the company's ability to compete against larger players in its markets and maintain financial conservatism, which serves to mitigate the risk of pressures on its thin distribution margins.

S&P said the low-investment-grade rating on Owens & Minor reflects the company's entrenched market position in the relatively mature and dynamic medical supply industry - a ratings strength offset by the competition that the company faces from well-established larger entities. Nevertheless, Owens & Minor has recently made moderate-size, conservatively financed acquisitions that should diversify its revenue base and bolster profitability over time.

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