Moody’s upgrades Kate Spade

Moody's Investors Service said it upgraded Kate Spade & Co.’s corporate family rating to Ba3 from B1, probability of default rating to Ba3-PD from B1-PD and senior secured term loan rating to Ba3 from B1.

The SGL-1 speculative grade liquidity rating was affirmed and the outlook is stable.

Moody’s said the upgrade reflects Kate Spade's roughly 1.2 times decline in lease-adjusted debt/EBITDA from 5.1 times to 3.9 times (as of April 4) due to changes in the agency’s approach for capitalizing operating leases. Moody's expects that the company will be able to maintain solid credit metrics as it pursues its strategy to expand product categories and geographic presence and repays debt over time.

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