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Moody's lowers Michael Stores
Moody's Investors Service said it lowered Michael Stores, Inc.'s probability of default and corporate family ratings to B3 from B2 while the company's SGL-3 rating was affirmed.
The outlook is negative.
The downgrade of the company's ratings reflects Moody's expectation that as a result of recent negative trends in sales and operating margins, metrics no longer remain appropriate for the B2 corporate family rating.
The agency added that the company has seen negative trends in same store sales and operating margins for the past few quarters and these trends are not anticipated to materially recover to historical levels in the near term.
Affected ratings include the company's probability of default rating to B3 from B2, $750 million senior unsecured notes due 2014 to Caa1 (LGD 5, 78%) from B2 (LGD 4, 57%), $400 million senior subordinated notes due 2016 to Caa2 (LGD 6, 91%) from Caa1 (LGD 6, 92%) and $469 million (principal amount at maturity) subordinated discount notes due 2016 to Caa2 (LGD 6, 95%) from Caa1 (LGD 6, 95%).
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