S&P rates Advance Stores loan BB+

Standard & Poor's said it raised its ratings on Advance Auto Parts Inc. and Advance Stores Co. Inc. The corporate credit rating was raised to BB+ from BB, and the outlook is stable.

The ratings revision reflects the company's improved credit measures and stable operating performance.

At the same time, S&P assigned its BB+ bank loan rating to Advance Stores Co. Inc.'s proposed $670 million senior secured credit facility. A recovery rating of 2 was also assigned to the facility.

The company anticipates using a majority of the proceeds from its tranche A and B term loans to refinance around $335 million of debt under its current term loans, and up to $175 million of proceeds from a delayed-draw facility to repurchase common shares. The revolver will be used to pay fees and expenses and for other operational needs.

S&P said the ratings on Advance Auto Parts Inc. and its primary operating subsidiary, Advance Stores Co. Inc., reflect the company's participation in the competitive automotive parts retail market and its history of aggressive acquisitions. These risks are mitigated by Advance's leading position in the auto supply retail segment, its improved operating performance and credit measures over the past few years, and its success in integrating previous acquisitions.

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