Moody’s rates G-III Apparel notes Ba3

Moody’s Investors Service said it assigned a Ba3 rating to G-III Apparel Group, Ltd.’s proposed senior secured notes offering.

Proceeds will be used to repay G-III’s senior secured term loan due December 2022 and for general corporate purposes. Upon completion of the refinancing, the Ba3 rating on the senior secured term loan will be withdrawn. G-III also intends to extend its unrated $650 million secured ABL revolver to 2025.

“The transaction will enhance G-III’s liquidity profile by extending its debt maturity profile and adding cash to the balance sheet,” stated Mike Zuccaro, a Moody’s apparel analyst, in a press release.

“Operating performance and credit metrics will significantly deteriorate in FY 2021. However, with a strong stable of brands and a very conservative leverage profile prior to the coronavirus pandemic, we expect performance and metrics to improve to levels more commensurate with the rating by the end of fiscal January 2022,” Zuccaro said.

Moody’s affirmed all existing ratings including its Ba3 corporate family rating, Ba3-PD probability of default rating and Ba3 on the senior secured term loan. Its speculative grade liquidity rating remains an SGL-3, and the rating outlook remains negative.

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