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Moody's ups Toys "R" Us
Moody's Investors Service said it upgraded Toys "R" Us, Inc.'s corporate family rating to B1 from B2 in response to the continued improvement in operating performance and credit metrics.
The agency also assigned a B1 rating (LGD3, 42%) to the company's proposed $1 billion senior secured credit facilities, which will be a combination of bank loans and notes.
The speculative grade liquidity rating was raised to SGL-2 from SGL-3 and the senior unsecured notes to B3 (LGD6, 93%) from Caa1 (LGD6, 93%).
"The upgrade of Toys' corporate family rating to B1 from B2 recognizes that despite the soft sales environment, the company has improved its credit profile through a combination of disciplined inventory management, effective merchandising and expense control," Moody's senior analyst Charlie O'Shea said in a statement.
"Management's strategy and strong execution have resulted in improved operating margins and higher absolute EBITDA. As a result, debt/EBITDA remains below 6 times, which was a key requirement to achieve the B1 corporate family rating."
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