Fitch rates Kohl's notes BBB-; outlook now stable

Fitch Ratings said it affirmed the long-term issuer default rating and unsecured debt for Kohl's Corp. at BBB- and assigned a rating of BBB- to Kohl's proposed $400 million 10-year notes.

The outlook has been revised to stable from negative.

Proceeds from the notes along with cash on hand will be used to tender up to $1 billion of existing notes due 2023 to 2025, for a net debt reduction of $600 million, Fitch said.

“Kohl's ratings reflect the significant business interruption resulting from the coronavirus pandemic. While there is significant uncertainty regarding the timing and magnitude of a recovery in operating momentum, the stabilization of its outlook reflects Fitch's expectation that adjusted debt/EBITDAR will improve to the low 3x range on projected Fitch calculated EBITDA of approximately $1.3 billion and proposed debt reduction,” Fitch said in a news release.

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