Moody's may cut Kellwood

Moody's Investors Service said it placed all ratings of Kellwood Co. under review for a possible downgrade.

The LGD assessments are subject to change, the agency said, adding that the review for downgrade follows Kellwood's recent announcement that it has lowered expectations for sales and operating earnings for the remainder of the current fiscal year.

Moody's said its previous negative outlook reflected concerns on sustainability of operating margins and financial metrics that were weak for the Ba2 rating category.

Moody's said it notes the company has full access to its committed revolving credit facility and cash balances of $129 million thus liquidity is considered to remain adequate.

The agency noted that the following ratings were placed under review: corporate family rating and probability of default rating at Ba2, $140 million debentures due July, 2009 at Ba3 (LGD 5 - 70%) and $130 million debentures due October, 2017 at Ba3 (LGD 5 - 70%).

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