Fitch downgrades Toys 'R' Us

Fitch Ratings said it downgraded the issuer default ratings on Toys 'R' Us, Inc. and its various domestic subsidiaries to CCC from B-.

The company's holiday comparable store sales for the nine weeks ended Jan. 4 mirror the weak trends of the past few quarters, Fitch said.

The ratings downgraded include the company's issuer default rating to CCC from B- and senior unsecured notes to CCC with a recovery rating of RR4 from B- with a recovery rating of RR4.

The agency also downgraded subsidiary Toys 'R' Us - Delaware, Inc.'s issuer default rating to CCC from B-, secured revolver to B with a recovery rating of RR1 from BB- with a recovery rating of RR1, secured term loans to CCC+ with a recovery rating of RR3 from CCC+ with a recovery rating of RR5, senior secured notes to CCC+ with a recovery rating of RR3 from CCC+ with recovery rating of RR5 and senior unsecured notes to CC with a recovery rating of RR6 from CCC with a recovery rating of RR6.

Fitch also downgraded subsidiary Toys 'R' Us Property Co. II, LLC's issuer default rating to CCC from B- and senior secured notes to B with a recovery rating of RR1 from BB- with a recovery rating of RR1.

The agency also downgraded subsidiary Toys 'R' Us Property Co. I, LLC's issuer default rating to CCC from B- and its senior unsecured term loan facility to B with recovery rating of RR1 from BB- with a recovery rating of RR1.

Fitch said it does not expect a turnaround in the business given sustained weakness in the juvenile and entertainment categories, and increasing competitive pressure on the traditional toy categories.

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