Moody’s might downgrade Coach

Moody's Investors Service said it placed the ratings of Coach, Inc. on review for downgrade.

The review was prompted by Coach's announcement that it will be acquiring Kate Spade & Co. for about $2.4 billion. The transaction will be financed by $2.1 billion in additional debt.

"Coach's acquisition of Kate Spade is another step in its plan to broaden its customer and product base to a younger, trendier millennial shopper," Moody's vice president Mickey Chadha said in a news release.

"While the acquisition gives Coach additional product lines and expansion opportunities it will increase Coach's financial leverage above our downward trigger of 3.0 times."

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