Moody's lifts Gregg

Moody's Investors Service said it upgraded the corporate family and probability-of-default ratings of hhgregg, Inc. (Gregg) to Ba3 from B, and affirmed the SGL-2 speculative grade liquidity rating. The agency also upgraded the senior secured term loan due 2013 to Ba3 (LGD3, 49%) from B2 (LGD4, 62%).

The outlook is stable. The actions conclude the review for upgrade that began on Oct. 12.

"Gregg has thus far been able to weather the macroeconomic storm that has negatively impacted a significant number of retailers, with the result that the solid operating performance for the past two quarters has driven this rating upgrade," Moody's senior analyst Charlie O'Shea said in a written statement.

The company's Ba3 rating is underpinned by the company's differentiated service model, varied product offerings and successful expansion, the agency said.

These strong metrics are balanced by Gregg's relatively small revenue base and the intense competition in all of its product categories, Moody's said.

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