Ollie's Holdings, Inc. -- Moody's - Ollie's proposed dividend is credit negative; no immediate change in rating or outlook

New York, May 18, 2015 -- Moody's Investors Service today said that Ollie's Holdings, Inc.'s (B2 stable) proposed amendment to its senior secured credit facilities to increase its ABL Revolving Credit Facility from $75 million to $125 million in order to borrow $50 million under the revolver for a dividend payment to existing shareholders is credit negative. The debt financed dividend will increase the company's debt/EBITDA from about 5.2 times to about 5.6 times and lower EBITA/interest to about 3.0 times from the current level of 3.2 times. However, the company's credit metrics will remain at levels consistent with its current B2 Corporate Family Rating and therefore there will be no immediate impact on the company's Corporate Family Rating. Although the larger ABL and the incremental borrowing under the ABL to finance the dividend will increase the amount of the senior most tranche of debt in the capital structure, the B2 rating of the company's senior secured Term Loan which is junior to the ABL will not be impacted as we expect the incremental borrowings to be materially repaid in the next 12 months. at levels consistent with its current B2 Corporate Family Rating.

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