DBRS downgrades RONA

DBRS said it downgraded RONA Inc.'s issuer rating and senior debt rating to BB (high) from BBB (low) and preferred shares rating to Pfd-4 (high) from Pfd-3 (low), maintaining the negative trend. DBRS has also assigned a recovery rating of RR2 to the company's senior debt.

In May 2012, the agency said that a downgrade would likely result if the company could not successfully improve its credit metrics due to weakness in operating income and/or more aggressive-than-expected financial management.

DBRS believes that continued deterioration in operating performance, which has prevented the company from delivering growth in sales, has resulted in a credit risk profile that is no longer consistent with a BBB (low) issuer rating.

The agency said the negative trend reflects its belief that meaningful recovery will remain challenging.

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