Moody’s upgrades Michaels

Moody's Investors Service said it upgraded Michaels Cos., Inc.’s corporate family rating to Ba2 from Ba3 and probability of default rating to Ba2-PD from Ba3-PD.

The rating on Michaels Stores, Inc.'s 5 7/8% subordinated notes due 2020 also was upgraded to B1 from B2.

The company's senior secured term loan due 2020 also was affirmed at Ba2.

The company’s speculative grade liquidity rating also was affirmed at SGL-1.

The outlook is stable.

The upgrades reflect the company’s consistently solid operating performance, ample cash flow generation and very good liquidity, Moody’s said.

The stable outlook represents an expectation that the company will maintain healthy operating margins relative to its specialty retail peers by continuing to drive positive same-store sales thus leveraging fixed costs, the agency said.

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