S&P rates Ace BB-

Standard & Poor's said it assigned a BB- corporate credit rating to Ace Hardware Corp. and a BB- rating to the $300 million senior secured notes due 2016 with a recovery rating of 4.

The outlook is stable.

Proceeds will be used to help refinance the company's senior unsecured revolver and private placement notes.

Ratings reflect the company's participation in the competitive and fragmented convenience hardware industry, modest sensitivity to the residential housing market, recent accounting issues and aggressive capital structure and fair credit protection measures, the agency said.

The company's good market position and recognized brand temper these factors somewhat, S&P noted.

The issuer's debt-to-EBITDA ratio is expected to grow to about mid-4 times at year-end 2008 from upper-3 times for the year ended Dec. 29, the agency said.

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