S&P rates Jones notes B+

Standard & Poor's said that it assigned a B+ senior debt rating to Jones Group Inc.'s proposed $300 million of senior notes due 2019. The recovery rating is a 5, indicating expectations for modest (10%-30%) recovery in the event of default.

The proceeds will be used to repay any borrowings under its credit facility ($14.5 million as of March 1) and for general corporate purposes. Proceeds will also replenish liquidity following the company's cash acquisition of a 55% interest in Stuart Weitzman Holdings ($180 million) completed in June 2010.

The ratings on Jones reflect the company's aggressive financial risk profile and fair business risk profile given the very competitive nature of the apparel and footwear businesses, and the company's concentration in the department store channel, the agency said.

The ratings also consider the company's scale and well-recognized brands in the women's apparel and footwear segments and its product portfolio diversity.

The BB- corporate credit rating on Jones Group remains unchanged.

The debt-to-EBITDA ratio was about 2.5 times for fiscal 2010.

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