Fitch rates Bon-Ton loans B+, notes CCC+

Fitch Ratings said it assigned a B- issuer default rating to The Bon-Ton Stores Inc., a B+ rating with a recovery rating of 2 to its $1 billion senior secured credit facility, a B+ rating with a recovery rating of 2 to its $260 million mortgage loan facility and a CCC+ rating with a recovery rating of 6 to its $525 million of senior unsecured notes. The outlook is stable.

About $1.2 billion of debt is projected to be outstanding upon completion of Bon-Ton's acquisition of Saks Inc.'s Northern Department Store Group, which is expected to close in March.

Fitch said the ratings reflect Bon-Ton's high financial leverage (4.7x) following the acquisition, the challenge of integrating a substantially larger business and soft operating results at both companies.

These factors are balanced against the strengthened competitive positioning and geographic diversity of the combined organization, the agency said.

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