Moody's lowers L Brands

Moody's Investors Service said it downgraded all ratings of L Brands, Inc. including its corporate family rating to Ba3 from Ba2 and its probability of default rating to Ba3-PD from Ba2-PD.

The agency also downgraded the company's senior unsecured guaranteed notes to Ba3 from Ba2 and the senior unsecured unguaranteed notes to B2 from B1. The speculative grade liquidity rating remains SGL-2. The outlook is stable. This rating action concludes the review for downgrade started on Dec. 17.

"Although the divestiture of Victoria's Secret will enable L Brands to focus on the growth of its stronger brand, Bath & Body Works, its platform will be less diversified and certain dis-synergies and execution risk will be faced, " said Christina Boni, a Moody's vice president, in a press release. "The lack of concept diversification is mitigated by Bath & Body Works' consistent operating performance and its planned reduction of debt."

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