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S&P lifts Levi Strauss, debt to BB-
Standard & Poor's said it raised its corporate credit rating on Levi Strauss & Co. to BB- from B+.
The outlook is stable.
The agency also raised its ratings on all of the company's senior unsecured debt to BB- from B+. The recovery ratings remain unchanged at 4, indicating an expectation for average (30% to 50%) recovery for noteholders in the event of a payment default.
"The one-notch upgrade reflects our view that Levi's could sustain its improved profitability and credit metrics," S&P credit analyst Linda Phelps said in a news release.
The agency estimates that Levi Strauss' EBITDA margins have improved, largely a result of lower year-over-year cotton costs in the first half of 2013 and elimination of the drag from the Denizen brand in Asia. Also, credit metrics for the 12 months ended Aug. 25 have improved with meaningful growth in EBITDA and lower debt levels, S&P said.
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