Moody's cuts Sears Canada notes to junk

Moody's Investors Service said it lowered Sears Canada Inc.'s senior unsecured notes to Ba1 from Baa3 and affirmed its corporate family and probability-of-default ratings at Ba1 and its speculative-grade liquidity rating at SGL-2.

The outlook remains stable.

The agency said the downgrade results from the release of collateral in connection with the maturity of the company's revolving credit facility.

The Ba1 corporate family rating recognizes Sears Canada's solid franchise and strong credit metrics, Moody's said.

According to the agency, key concerns include the potential impact on financial policy decisions that could be made by the company's ultimate 74% owner, Sears Holdings.

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