Moody's upgrades Levi Strauss, notes

Moody's Investors Service said it upgraded Levi Strauss & Co.'s corporate family rating to Ba2 from Ba3.

The agency also upgraded the company's various senior unsecured notes to Ba3 from B1.

The SGL-1 speculative grade liquidity rating was affirmed and the outlook is stable.

Moody's said the action considers the company's notice that it will be redeeming €150 million (about $210 million) of its €300 million senior unsecured notes due 2018.

The agency expects the company will ultimately repay the full amount from cash on hand, though it may temporarily access its $850 million asset-based revolver to fund a portion of the tender.

The action also considers the company's announced restructuring plans, which are expected to generate annualized cost savings in the range of $175 million to $200 million over the next 12 to 18 months. Moody's said it believes that with the benefits of lower debt levels and achievement of a meaningful amount of these synergies will enable the company to reduce debt/EBITDA toward the mid-3 times range by the end of Levi Strauss' current fiscal year-end.

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