Moody's drops Escada

Moody's Investors Service said it has downgraded the corporate family rating of Escada AG and the senior unsecured rating on the €200 million notes due 2012 to B3 from B2.

The outlook remains negative.

"The rating downgrade follows the third revision of EBITDA guidance for the full year made by the company in less than a year, and the concerns Moody's has on the ongoing softness in consumer spending and the relatively high cash burning rate of the company that are likely to erode the recently restored liquidity profile of the company," said Paolo Leschiutta, Moody's lead analyst for Escada.

"Moody's understand the company is implementing its restructuring plan aimed at improving operating performances, however challenging market conditions are likely to offset part of the benefits expected and key credit metrics are expected to remain in line with a weak single-B rating beyond FYE October 2008," added Leschiutta.

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