Moody's ups Jones Apparel to SGL-1

Moody's Investors Service said it upgraded the speculative grade liquidity rating of Jones Apparel Group, Inc. to SGL-1 from SGL-2.

The company's Ba2 corporate family and probability-of-default ratings and Ba3 senior unsecured note rating (LGD5, 72% from 71%) were affirmed.

The outlook remains stable.

Jones' SGL-1 Speculative Grade Liquidity rating acknowledges the company's significantly improved free cash flow profile resulting from improved operating margins, more efficient working capital management and reduced capital expenditure requirements, the agency said.

Jones' Ba2 corporate family rating considers its low operating margins and significant reliance on the department store channel, the agency noted.

The company's large scale of operations, the breadth of its brand portfolio, very good liquidity profile and moderate leverage support ratings, Moody's said. Debt-to-EBITDA ratio is about 3.8 times.

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