Moody’s cuts True Religion, loans to Ca

Moody's Investors Service said it downgraded True Religion Apparel, Inc.'s corporate family rating to Ca from Caa2, probability of default rating to Caa3-PD from Caa2-PD, first-lien term loan to Ca from Caa2 and second-lien term loan to Ca from Caa3.

The outlook remains negative.

Moody’s said the downgrades reflect its view that True Religion's ongoing earnings declines and unsustainable capital structure (with about 16 times leverage based on management EBITDA, as of October) have increased the company's probability of default.

In addition, the agency lowered its recovery estimate on the company's debt reflecting the significant earnings declines year-to-date 2016 and expectations for continued challenges in the next several years.

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