S&P lowers Smile Brands

Standard & Poor's said it lowered the corporate credit rating on Smile Brands Group Inc. to B- from B, along with its senior secured debt to B- from B.

The recovery rating on this debt remains unchanged at 3, indicating 50% to 70% expected recovery in a default.

The outlook was revised to negative.

The ratings continue to reflect its vulnerable business risk profile, characterized by its narrow scope of operations in intensely competitive markets with low barriers to entry, S&P said.

Smile Brands had negative free operating cash flow after elevated capital spending for the past four quarters and it is expected to continue in the fourth quarter of 2012, the agency said.

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