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S&P rates Hudson's Bay B+, loan BB
Standard & Poor's said it assigned its B+ long-term corporate credit rating and stable outlook to Hudson's Bay Co.
At the same time, the agency raised its long-term corporate credit rating on subsidiary Lord & Taylor Holdings LLC to B+ from B, as the subsidiary rating is linked directly to the rating on Hudson's Bay.
S&P also lowered its long-term corporate credit rating on Saks Inc. to B+ from BB, reflecting the strong likelihood of the company's ultimate 100% ownership by Hudson's Bay. The ratings on Saks have also been removed from CreditWatch, where they were placed with negative implications July 22.
The outlook on Lord & Taylor and Saks is stable.
Finally, the agency assigned its BB issue-level rating and 1 recovery rating to Hudson's Bay's proposed $1.9 billion term loan B, reflecting very high (90%-100%) recovery in a default scenario.
"The ratings on HBC reflect what we view as the company's weak business profile, characterized by competitive conditions for department stores in North America that have contributed to weak and volatile profitability," S&P credit analyst Donald Marleau said in a news release.
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