S&P rates L Brands notes BB+

S&P said it assigned its BB+ issue-level rating and 3 recovery ratings to L Brands Inc.'s proposed $700 million senior unsecured notes due 2036.

The 3 recovery rating indicates an expectation of meaningful recovery, at the high end of the 50%-70% range, in the event of payment default.

L Brands plans to issue the notes with subsidiary guarantees and intends to use the net proceeds, together with cash on hand, to redeem the 6.9% senior unsecured notes due 2017 and for general corporate purposes.

The proposed transaction is leverage-neutral and therefore does not change the company's credit metrics.

The agency expects the company will maintain credit ratios, including adjusted debt leverage in the low- to mid-2 times area over the next 12 months.

S&P said the BB+ corporate credit rating and stable outlook reflect L Brands’ solid market position in intimate apparel and personal care products, strong brand recognition and marketing capabilities.

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