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S&P: School Specialty positive
Standard & Poor's said it revised its outlook on School Specialty Inc. to positive from stable. Ratings on the company, including the BB corporate credit rating and B+ subordinated debt rating, were affirmed.
S&P said the outlook revision is based on the company's improved financial profile following the conversion of about $115 million of its 6% convertible subordinated notes to common stock. As a result, leverage declined, with total debt to EBITDA at 3x, compared with 4x prior to the conversion. In addition, pro forma cash flow protection measures improve, with EBITDA covering interest by about 6x, compared with 5x prior to the conversion.
Although credit measures are strong for the rating, they are partially offset by the company's aggressive growth strategy through debt-financed acquisitions, S&P said.
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