Moody's upgrades Rent-A-Center debt

AP News
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Posted: Nov 24, 2009 2:34 PM

Moody's Investors Service on Tuesday upgraded its corporate family debt rating on Rent-a-Center Inc. by one notch within junk territory, now that Rent-a-Center has paid down about $300 million in senior unsecured debt.

Moody's said the repayment leaves Rent-a-Center with an all-bank capital structure.

"The action also recognizes that the company has improved its debt protection metrics despite weaker operating performance as it has materially reduced its debt levels," Moody's Senior Analyst Bill Fahy said in a statement.

Moody's now rates Rent-a-Center Ba2, which it characterizes as speculative. That's two levels below the lowest investment-grade rating.

Moody's also said its outlook was stable and affirmed its probability of default rating at Ba3, also speculative.

Rent-a-Center offers household durables such as refrigerators, washers, dryers, computers and furniture for sale through installment payments or through rent-to-own arrangements.

Its shares fell 15 cents to $18.22 in afternoon trading.