S&P ups Burlington Coat loan

S&P said it affirmed its BB corporate credit rating on Burlington Stores Inc. and Burlington Coat Factory Warehouse Corp. and revised the outlook to positive from stable.

At the same time, the agency raised the issue-level rating on the company's senior secured term loan due November 2024 to BBB- from BB+ and revised the recovery rating to 1 from 2, indicating very high (90%-100%; rounded estimate: 95%) recovery in the event of a payment default.

S&P also affirmed the BBB- issue-level rating on the company's $600 million asset-based lending revolving credit facility due August 2019. The recovery rating is 1 (90%-100%, rounded estimate: 95%).

The agency said the upgrade reflects that Burlington Stores prepaid $150 million of its $1.1 billion term loan mainly with revolver borrowings.

S&P said the positive outlook reflects a view that the company will expand its adjusted EBITDA margin to about 18%, reduce adjusted leverage to less than 3x this year and could pursue a moderate financial policy on a sustained basis.

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