Moody's: Sears outlook stable

Moody's Investors Service said it revised Sears Holdings Corp.'s outlook to stable from negative and affirmed its corporate family rating at B3, probability of default rating at B3-PD and $1.24 billion senior secured notes due 2018 at B2 (LGD3, 43%), Sears, Roebuck and Co.'s issuer rating at B3 and Sears Roebuck Acceptance Corp.'s senior debt at Caa1 (LGD5, 78%, changed from 77%). The speculative grade liquidity rating is unchanged at SGL-2.

The agency said the outlook revision reflects Sears' moderate improvement in financial performance during 2012 and Moody's expectations that performance should be sustained near these levels over the course of 2013.

Moody's said Sears' B3 corporate family rating continues to reflect the company's weak operating performance, operating losses in the past two years and high level of leverage, which was near 8 times at the end of its most recent fiscal year.

The ratings also consider the company's good overall liquidity profile, leading market share in the sale of appliances and ownership of consumer brands including Kenmore, Craftsman, Die-Hard and Lands' End, the agency said.

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