Fitch affirms Saks

Fitch Ratings said it affirmed Saks Inc.'s long-term issuer default rating at B-, senior secured bank credit facility at BB-/RR1 and senior unsecured notes at B/RR3.

The outlook is negative.

Saks has amended and extended its $500 million credit facility due September 2011 to November 2013. The extension follows other endeavors to bolster liquidity, the agency said, and these steps will help the company deleverage its balance sheet in the near term.

Fitch said it sees continued risk and pressure, however, on operating margins, free cash flow and credit metrics over the next 12-18 months, given the continued weakness in luxury department store sales.

Adjusted debt-to-EBITDAR ratio is expected to be 9 times at the end of 2009 versus 13x at the end of 2008 but could return to the 12x to 13x range in 2010, the agency said.

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