NEW YORK — Moody's Investors Service here said Tuesday it has upgraded Dollar General Corp.'s senior unsecured rating to Baa3 from Ba2, reflecting the company's strong operating performance going forward.
The upgrade also acknowledges Dollar General's proposed refinancing of its secured term loan and asset-based revolving credit facility with unsecured facilities, Moody's said, adding that it anticipates the proposed refinancing will be consistent with an investment-grade capital structure that will leave Dollar General with a predominantly unsecured capital structure by the close of the first fiscal quarter.
Read more: Dollar General Sees Trading Down Continue
Moody's said the rating reflects Dollar General's solid credit metrics and its good liquidity, along with its balanced and prudent financial policy. Moody's said it anticipates the company will use excess cash flow after capital expenditures to make share repurchases and may potentially also borrow to finance share repurchases but only to the extent it stays within its leverage target.
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