Moody's upgrades Saks

Moody's Investors Service said it upgraded Saks Inc.'s probability of default rating to B2 from B3 and placed its B2 corporate family rating and B3 (to LGD5, 72% from LGD4, 53%) senior notes rating on review for possible upgrade.

The actions reflect Saks' notably stronger earnings for the first nine months of 2010, which has led to a solid improvement in credit metrics, Moody's said.

Saks' earnings have notably improved due to higher consumer spending, a rebound in the luxury goods markets and the company closing underperforming stores that had previously been a small drag on earnings, the agency said.

The company's improved operating performance has lessened the risk of default, Moody's added.

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