Moody's: Jones Group notes Ba3

Moody's Investors Service said it affirmed Jones Group, Inc.'s Ba2 corporate family and probability of default ratings, as well as its SGL-2 speculative grade liquidity rating.

The agency said it also assigned a Ba3 rating to the company's proposed $100 million in aggregate principal amount of 6 7/8% senior notes due 2019.

The outlook was revised to negative from stable.

Moody's said it also affirmed the company's $250 million senior unsecured notes due 2014, its $300 million senior unsecured notes due 2019 and its $250 million senior unsecured notes due 2034 at Ba3.

The agency said the outlook revision to negative primarily reflects recent weak operating trends at Jones, with operating margins falling by over 100 basis points in the first half of 2012.

While the incremental debt financing will bolster Jones' liquidity position, it is increasing leverage at a time when performance has been weak, further pressuring Jones' credit metrics, Moody's said. As such, ratings could be pressured if the company is unable to meaningfully reverse negative trends over the next few quarters.

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