Moody's rates Toys "R" Us notes B3

Moody's Investors Service said it assigned a B3 rating (LGD5, 70%) to the $950 million senior unsecured notes for Toys "R" Us Property Co. I, LLC and upgraded a senior secured term loan for Toys "R" Us Delaware, Inc. to B1 from B2.

The agency affirmed Toys "R" Us, Inc.'s B2 corporate family and probability-of-default ratings, and SGL-3 speculative grade liquidity rating.

The outlook is stable.

Proceeds will be used to refinance and replace a $1.3 billion senior unsecured credit facility at Toys Propco.

The affirmation reflects the company's solid operating performance during this downturn and improved credit metrics with a debt-to-EBITDA ratio falling to 5.9 times.

"Toys has done a credible job navigating this difficult macroeconomic environment, with its improved operating discipline the major reason," Moody's analyst Charlie O'Shea said in a statement.

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