Moody’s affirms VF Corp.

Moody’s Investors Service said it affirmed VF Corp.'s debt ratings, including its A3 senior unsecured debt rating and the P-2 short-term commercial paper rating.

The outlook is stable.

The actions follow VF's announced plan to separate into two independent publicly traded companies by spinning off its Jeanswear and VF Outlet businesses, the agency said.

"While VF's revenue and earnings will be lower post spin, the affirmation reflects our expectation that the company will maintain a more conservative financial policy as it reshapes its portfolio, focusing on rapid debt reduction with free cash flow and potential proceeds from a spinco distribution," Moody's apparel analyst Mike Zuccaro said in a news release.

"VF will remain one of the largest apparel companies in the world, with broad diversification by product and distribution channel. However, in our estimation, the loss of the Jeanswear business will slightly increase volatility for the remaining company going forward.

“In addition, given the company's focus on reshaping its portfolio of brands and current elevated leverage, event risk remains high.”

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