Moody's: Levi's up to stable, notes rated Ca

Moody's Investors Service said it assigned a Ca rating to Levi Strauss & Co.'s proposed $375 million 10-year senior notes issue, affirmed existing ratings and revised the outlook to stable from negative.

Moody's affirmed Levi's Caa2 rated $500 million guaranteed senior secured term loan facility due 2009, Ca rated $1.4 billion senior unsecured notes due through 2012, Caa2 senior implied rating and Ca issuer rating.

The ratings are based on Moody's understanding that the entire proceeds of the new issue will be utilized to refinance existing debt and will not cause Levi's outstanding debt to increase.

Moody's said the outlook revision recognizes the steps the company has taken to reduce expenses and rationalize its business, its improved earnings, gross margin and cash flow from operations, the expected stabilization in sales and the longer maturity profile that this transaction will provide.

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