Moody's downgrades Jo-Ann Stores

Moody's Ratings said it downgraded Jo-Ann Stores LLC's corporate family rating to Ca from Caa3 and probability of default rating to D-PD from Caa3-PD. At the same time, the agency affirmed the company's C rating on the senior secured first-lien term loan B1 and changed the outlook to stable from negative. Its speculative grade liquidity rating remains unchanged at SGL-4.

On Monday, Jo-Ann’s parent company Joann, Inc. started voluntary prepackaged Chapter 11 proceedings and entered a transaction support agreement that will chop about $505 million of its total debt.

The company may finish its restructuring as early as late April.

Given the bankruptcy filing, Moody’s said it will withdraw its ratings.

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