Moody’s cuts, to withdraw Toys ‘R’ Us

Moody's Investors Service said it downgraded Toys ‘R’ Us, Inc.'s probability of default rating to D-PD from B3-PD.

The downgrade was prompted by Toys' Sept. 18 announcement that it initiated Chapter 11 bankruptcy proceedings.

The outlook is stable.

"Moody's views this as a case of reasonable business/bad balance sheet, with the untenable capital structure ultimately too much to bear," Moody's vice president Charlie O'Shea said in a news release.

"The overall business is fundamentally sound, and it is our expectation that overall recovery will be well-above the norm."

Subsequent to these actions, Moody's will withdraw the ratings due to Toys' bankruptcy filing.

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