DUFF & PHELPS RATES SERVICE MERCHANDISE COMPANY'S $100 MILLION OF SENIOR NOTES DUE 2001 "BB+"
NEW YORK, Oct. 20 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a BB+ (Double-B-Plus) to Service Merchandise Company, Inc.'s (SME) offering of $100 million of senior notes due 2001 and affirms its BB rating on SME's outstanding senior subordinated debentures. Proceeds from the offering will be used to fund an increased number of new store openings this year and in the future, and to prepay $29 million of high coupon mortgages. This debt offering will also lessen SME's reliance on its working capital lines. The Duff & Phelps ratings reflect an adequate operating performance in the face of a slow economic recovery, declining interest expense, an improving capital structure, and the position of these notes and debentures relative to secured bank debt. In addition, SME's internally generated cash flow is expected to be more than sufficient to meet budgeted capital needs and mandatory debt retirement for the foreseeable future. The ratings also reflect: continued competitive pressure on operating margins, the significant seasonality of the company's business, and the more aggressive new store opening program. Operating through 378 stores nationwide, SME is an established retailer, employing a catalog showroom format that emphasizes brand name hardgoods and quality jewelry at competitive prices. -0- 10/20/93 /CONTACT: Tom P. Razukas, CFA of Duff & Phelps Credit Rating Co., 212-908-0201/ (SME)
CO: Service Merchandise Company, Inc. ST: New York IN: REA SU: RTG
LD -- NY104 -- 4792 10/20/93 17:05 EDT
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|Date:||Oct 20, 1993|
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