Moody's rates Gymboree notes Caa1

Moody's Investors Service said it assigned a Caa1 rating to the Gymboree Corp.'s proposed offering of $400 million senior unsecured notes.

The agency also said it affirmed Gymboree's B2 corporate family and probability of default ratings, as well as the B1 rating assigned to the company's proposed $820 million senior secured term loan, upsized from $720 million.

The outlook is stable.

The ratings reflect the company's highly leveraged capital structure following its proposed acquisition by Bain Capital, Moody's said.

Leverage will be high, with debt-to-EBITDA near 6.5x after the proposed transaction, the agency said.

The ratings also consider the moderate scale and the highly fragmented infant and toddler apparel market, Moody's added.

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