Moody's confirms Genesco

Moody's Investors Service said it confirmed Genesco Inc.'s corporate family and probability-of-default ratings at B1 and its $86 million convertible senior subordinated debentures at B2 (LGD5, 72%).

The outlook is stable.

Moody's said the confirmation reflects that the company's credit profile is unchanged by the successful settlement between Genesco, Finish Line and UBS of the lawsuits surrounding the disputed plan of merger between Genesco and Finish Line.

While the settlement results in Genesco receiving $175 million in cash, the agency said all of the after-tax proceeds will go to shareholders and therefore has no impact on the company's financial metrics. This action concludes the review for downgrade that began on April 20, 2007.

The B1 corporate family rating reflects the company's moderately weak credit metrics, as well as expectation for a further modest weakening in credit metrics over the next 12 months as a result of an overall soft retail sales environment, the agency said.

The rating is also constrained by both the company's high business risk given its narrow product niches and its high seasonality, Moody' said.

The rating also incorporates national geographic presence, reasonable level of profitability, average size and scale, moderate financial policies and adequate liquidity, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.