Moody’s ups BJ’s Wholesale, loan

Moody's Investors Service said it upgraded all ratings of BJ’s Wholesale Club Inc., including the corporate family rating to B1 from B3, probability of default rating to B1-PD from B3-PD and senior secured first-lien term loan to B2 (LGD4) from B3 (LGD4), and assigned an SGL-1 speculative grade liquidity rating.

The outlook is stable.

"These rating actions follow BJS successful IPO, with the application of significant proceeds to completely repay the $625 million second-lien term loan," Moody's vice president Charlie O'Shea said in a news release.

"As a result of this repayment, BJS' credit profile improves dramatically, with debt/EBITDA at the May 2018 LTM reducing to around 5.4 times pro-forma for the repayment from the actual 6.2 times level.

"The prior rating was hamstrung by high leverage emanating from the aggressive sponsor-driven financial policy, which this significant repayment largely alleviates. BJS' operating performance continues its steady favorable trend, which we expect to continue."

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