TEXT-S&P rates O'Reilly Automotive proposed notes 'BBB'
Aug 16 - Standard & Poor's Ratings Services said today that it has assigned its 'BBB' senior unsecured debt rating to Springfield, Mo.-based automotive aftermarket retailer O'Reilly Automotive Inc.'s proposed $300 million senior unsecured notes due 2022. We expect the company to use the net proceeds from the offering for general corporate purposes, including share repurchases. The debt offering is consistent with O'Reilly's plan to reach its 2.00x to 2.25x target leverage metric over time. The company's internal leverage metric is close to Standard & Poor's calculated leverage metric. Pro forma for the proposed debt offering, leverage (using Standard & Poor's adjustments) is about 1.9x, compared with 1.6x as of the 12 months ended June 30, 2012. On Aug. 10, 2012, O'Reilly's Board of Directors increased the aggregative share repurchase authorization to $2.5 billion from $2 billion. We estimate pro forma for the increase that the company had about $600 million remaining under its share repurchase authorization as of Aug. 8, 2012. O'Reilly's ratings reflect our view that the company's profitability will remain satisfactory and credit measures will be solid for the rating category despite weakening industry demand. The company has a "satisfactory" business risk profile as the third-largest competitor in the generally stable retail automotive parts industry and a good operational management team, as the company's history of satisfactory growth and profitability demonstrates. Its "intermediate" financial risk profile reflects our opinion that credit metrics will weaken modestly over time, most likely due to share repurchases or acquisition activity. (For the complete corporate credit rating rationale, see the summary analysis on O'Reilly, published July 20, 2012, on RatingsDirect.) RELATED CRITERIA AND RESEARCH -- Understanding Standard & Poor's Rating Definitions, June 3, 2009 -- Business Risk/Financial Risk Matrix Expanded, May 27, 2009 -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008 RATINGS LIST O'Reilly Automotive Inc. Corporate Credit Rating BBB/Stable/-- New Rating O'Reilly Automotive Inc. Senior Unsecured $300 mil notes due 2022 BBB
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DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.