S&P rates School Specialty loan B

Standard & Poor's said it assigned its B corporate credit rating to School Specialty Inc. following the company's emergence from bankruptcy protection.

At the same time, S&P assigned its B issue-level rating to School Specialty's $145 million term loan facility due 2019 with a 3 recovery rating.

The outlook is stable.

"The ratings on SSI reflect Standard & Poor's assessment of a 'vulnerable' business risk profile and a 'highly leveraged' financial risk profile. Our business risk profile assessment reflects SSI's participation in the highly fragmented school supplies industry and vulnerability to government funding for education," S&P credit analyst Ana Lai said in a news release.

"The company's leading market position and national distribution network partially offset these factors. We expect SSI's end markets to stabilize over the next 12 months as state and local education budgets are beginning to show signs of improvement and have been further supported by increased property tax receipts from a rebounding housing market."

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