Moody's ups Quiksilver

Moody's Investors Service said it upgraded Quiksilver Inc.'s corporate family and probability of default ratings to B2 from B3, along with the rating on its $400 million senior unsecured notes to Caa1 (LGD 5, 77%) from Caa2 (LGD 5, 80%). The company's speculative grade liquidity rating was affirmed at SGL-3.

The outlook is positive.

The upgrade primarily reflects the deleveraging impact of Quiksilver's exchange of $140 million of the outstanding principal amount of its senior secured term loans for about 31.1 million shares of its common stock at an exchange price of $4.50 per share, Moody's said.

The exchange also will result in a meaningful reduction in interest expense for the company, the agency said.

The ratings also take into consideration that Quiksilver's product range is generally sold at a relatively higher price point vis-à-vis other apparel offerings, Moody's said.

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