Moody's: Kohl's unchanged

Moody's Investors Service said that news of Kohl's Corp.'s first-ever dividend and increased share repurchase program has no immediate impact on either its Baa1 senior unsecured rating or its stable outlook.

A return of cash to shareholders seems understandable given Kohl's solid operating performance throughout the downturn, which has resulted in the build-up of more than $2 billion in cash, Moody's said.

As the returns are executed, the agency said it will pay particular attention to the impact on the company's debt-to-EBITDA ratio, which is expected to be muted as the company plans to utilize excess cash and free cash flow to fund almost all of the returns.

The rating continues to reflect the company's strong and stable market position, innovative merchandising and the expectation of continued solid credit metrics, Moody's said.

The rating also considers the continuing weak macroeconomic environment, the agency said.

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