Moody's cuts Genesco debentures to B2

Moody's Investors Service said it downgraded Genesco Inc.'s corporate family and probability-of-default ratings to B1 from Ba3 and maintained the review for downgrade.

Moody's also downgraded the company's $86 million convertible senior subordinated debentures to B2 (LGD5, 73%) from B1 (LGD4; 68%).

The downgrade reflects the company's weaker operating performance over the first six months of this year, which has resulted slipping credit metrics, according to the agency.

In addition, Moody's said it expects operating performance to continue to be strained given the difficult retail environment, which could further weaken credit metrics.

The B1 corporate family rating also is constrained by the company's high business risk given its narrow product niches and its high seasonality, the agency said.

The rating also incorporates the company's size and scale, national geographic presence, reasonable profitability and pragmatic financial policies, Moody's said.

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