Fitch rates Toys 'R' Us loan CCC

Fitch Ratings said it assigned a CCC/RR6 rating to the $180 million unsecured term loan issued by Toys 'R' Us, Delaware and affirmed Toys 'R' Us, Inc.'s issuer default rating at B- and its senior unsecured notes at CCC-/RR6.

The outlook was revised to stable from negative.

The agency said the affirmations and change in outlook reflect management's turnaround efforts, which have led to improving performance at the company's core U.S. toy segment as well as the steady performance in the international toy and Babies 'R' Us segments.

The ratings continue to reflect Toys 'R' Us' highly leveraged balance sheet and the intense competition in the toy business, Fitch said, adding that the adjusted debt-to-EBITDAR ratio decreased to 6.8x for the last 12 months ended May 5 from 8.1x in 2005 but remains high.

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