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Summary: Orchard Supply Hardware LLC Dec 11
Standard & Poors, December 2011
The rating on San Jose, Calif.-based home and garden retailer Orchard Supply Hardware LLC reflects our expectation that operating results in 2011 will remain under pressure, with negative sales trends and squeezed margins, despite tight expense management. As such, Standard & Poor's Ratings Services expects credit protection measures to weaken , with total debt to EBITDA reaching over 7.0x in fiscal 2011, compared with our previous expectations of about 6.1x. Due to weaker-than-expected cash flow generation, we expect Orchard to operate with limited covenant headroom of less than 10% of EBITDA under the term loan's adjusted leverage ratio, despite some debt repayment. We view Orchard's financial profile as "highly leveraged" (based on our criteria), given the significant amount of debt...
Companies mentioned in this report are: Orchard Supply Hardware LLC
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Orchard Supply Hardware LLC