Moody's cuts Sears

Moody's Investors Service said it downgraded the Baa1 long term debt ratings of Sears Roebuck and Co. and Sears Roebuck Acceptance Corp. (senior unsecured to Baa2) and continued the review for possible downgrade, as well as placed the prime-2 short term rating of Sears Roebuck Acceptance Corp on review for possible downgrade.

Moody's said this rating action considers today's announcement that Sears is being acquired by unrated K-Mart Holdings in a transaction valued at $11 billion.

Moody's cut Sears Roebuck and Co.'s senior unsecured debt, senior unsecured MTN and long-term issuer rating to Baa2 from Baa1, senior unsecured shelf to prospective Baa2 from prospective Baa1 and preferred shelf to prospective Ba1 from prospective Baa3, Sears Roebuck Acceptance Corp.'s senior unsecured debt and senior unsecured MTN to Baa2 from Baa1, subordinate MTN to Baa3 from Baa2, senior unsecured shelf to prospective Baa2 from prospective Baa1 and subordinate shelf to prospective Baa3 from prospective Baa2 and Sears DC Corp.'s medium-term notes to Baa2 from Baa1.

Despite the solid strategic basis for the transaction, which will combine a predominantly mall-based retailer with a predominantly off-mall retailer, Moody's said both the Sears and the Kmart franchises remain challenged.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.