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Moody's drops Claire's Stores
Moody's Investors Service said it downgraded Claire's Stores, Inc.'s, ratings, including its probability of default rating to Caa1 from B3 and speculative-grade liquidity rating to SGL-4 from SGL-3.
In addition, Claire's long term ratings were placed on review for further possible downgrade, the agency added, noting that the downgrade to Caa1 reflects Claire's weak operating performance over the past two quarters that has led to deterioration in its debt protection measures.
In particular, EBITA to interest expense fell to 0.9 times for the lagging twelve month period ended May 3, the agency added, noting that the review for further possible downgrade reflects the high likelihood that Claire's debt protection measures will get worse given the challenging economic environment which makes the company highly susceptible to further earnings and cash flow pressure.
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