Moody's confirms Toys 'R' Us

Moody's Investors Service said it confirmed Toys 'R' Us, Inc.'s B1 corporate family and probability of default ratings, SGL-2 speculative grade liquidity rating, along with its senior notes at B3 (LGD 6, 93%).

The agency also said it affirmed Toys 'R' Us Delaware, Inc.'s 8¾% debentures due 2021 at B2 (LGD 5, 74%), senior secured term loan at B1 (LGD 3, 42%), senior secured notes at B1 (LGD 3, 42%), along with Toys 'R' Us Property Co. I, LLC's senior notes at B2 (LGD 5, 74%) and Toys 'R' Us Property Co. II, LLC's senior secured notes at Ba1 (LGD 2, 14%).

These actions conclude a review for possible upgrade that began in August.

The outlook is stable.

The ratings recognize that while the company continues to maintain an active initial public offering registration, which was filed in May 2010, Moody's said there is limited visibility as to the timing of a potential IPO.

The confirmation also acknowledged that despite the soft sales environment, the company continues to perform well through a combination of disciplined inventory management, effective merchandising and expense control, the agency said.

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