Moody's may upgrade Saks

Moody's Investors Service said it changed the direction of Saks Inc. (B2 corporate family rating) review to on review for possible upgrade from on review for possible downgrade as a result of the company effectively curing the defaults triggered by its failure to timely file its fiscal year end financial statements, as well as its improved liquidity as a result of a significant asset sale.

During July, the company successfully completed the sale of the assets to Belk and received $622 million in proceeds. It also tendered for about $586 million of senior notes reducing its debt to about $765 million including capital leases, the agency said.

Following these transactions, Saks has about $250 million of cash balances and $650 million of undrawn capacity on its $800 million revolver, Moody's added.

Moody's said its review for possible upgrade will focus on the company's progress in resolving the internal investigation and preparing the delayed financial statements, the scope and timing of the SEC investigation and the company's liquidity profile.

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