Moody's lifts L Brands view to stable

Moody's Investors Service said it affirmed all of the ratings on L Brands, Inc., including its Ba1 corporate family rating and Ba1-PD probability of default rating.

The speculative grade liquidity rating also was affirmed at SGL-1, along with the Ba1 (LGD 4) rating on the company's existing senior unsecured guaranteed notes and Ba2 (LGD 6) rating on its existing senior unsecured unguaranteed notes.

The outlook was changed from stable to negative.

L Brand's negative outlook reflects the deteriorating operating margins and negative comparable store sales at Victoria's Secret for the past 10 quarters, Moody's explained.

The ratings are supported by the company's popular well-recognized brand names and strong free cash flow, the agency said.

The company has very good liquidity and moderate leverage with debt to EBITDA of 3.6x as of February 2019, Moody's said.

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