Fitch lowers Kohl's

Fitch Ratings said it downgraded to BBB+ from A Kohl's Corp.'s long-term issuer default rating, $900 million bank credit facility and $900 million senior unsecured notes and debentures.

The outlook is stable.

These actions follow the company's announcement that its board of directors authorized a $2.5 billion share repurchase program, which it expects to fund with cash flow and debt financing over the next three years.

Fitch said it views the action as a shift in financial strategy and expects Kohl's credit metrics to weaken from current levels. For the 12 months ended Aug. 4, its total adjusted debt-to-EBITDAR ratio was 1.6 times.

The ratings reflect the company's convenient off-mall store format, the geographic diversity of its store base and its improved operating performance, Fitch said.

These strengths are balanced against a more aggressive financial policy, the challenges of executing an aggressive expansion program and the competitive nature of middle market retailing, the agency said.

Moody's could lower Kohl's

Moody's Investors Service said it placed the long-term senior unsecured debt rating of Kohl's Corp. under review for downgrade following its announced board approval of a $2.5 billion share repurchase program. The issuer has a senior unsecured debt rating at A3.

The possible downgrade reflects the buyback program's partial debt funding, which is likely to hurt debt protection measures, the agency said. The move also signals a change in the company's financial policy, Moody's noted.

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