Fitch: Toys 'R' Us loan B-

Fitch Ratings said it assigned a B- with a recovery rating of RR5 to Toys 'R' Us, Inc. subsidiary Toys 'R' Us - Delaware, Inc.'s new $1.1 billion senior secured term loan, which includes a $700 million tranche 1 due 2016 and $400 million tranche 2 due 2018.

The proceeds will be used to repay the existing $698 million senior secured term loan due 2016 and the $500 million 7 5/8% senior unsecured notes at Toys 'R' Us due 2011.

Upon repayment, Fitch's B- rating with recovery rating of RR5 on the $700 million senior secured term loan and CC rating with recovery rating of RR6 on the $500 million 7 5/8% senior notes will be withdrawn.

Based on the strengthening loan capital markets in the last six months, Fitch said it expects the new senior secured term loan will have better pricing than the existing term loan.

The company's other ratings also are currently on Rating Watch positive pending the outcome of the company's initial public offering announced in May 2010, Fitch said.

Fitch said it has an expectation that the company's operating performance will not deteriorate from current levels, which will result in a strengthening in fiscal 2011 credit metrics.

Toys 'R' Us has an issuer default rating of B and senior unsecured notes rating of CC with a recovery rating of RR6. Toys 'R' Us - Delaware has an issuer default rating of B, secured revolver rating of BB with a recovery rating of RR1, secured term loan rating of B- with a recovery rating of RR5, senior secured notes rating of B- with a recovery rating of RR5 and senior unsecured notes rating of CCC with a recovery rating of RR6.

Toys 'R' Us Property Co. I, LLC has an issuer default rating of B and senior unsecured notes rating of BB with a recovery rating of RR1. Toys 'R' Us Property Co. II, LLC has an issuer default rating of B and senior unsecured notes rating of BB- with a recovery rating of RR2. Toys 'R' Us Europe, LLC has an issuer default rating of B and a secured revolver of BB with a recovery rating of RR1.

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