Moody's rates Toys loan B3

Moody's Investors Service said it assigned a B3 (LGD5,77%) rating to Toys 'R' Us Property Co. I, LLC's proposed $985 billion senior credit facility due 2019. All other ratings, including the B2 corporate family rating of Toys 'R' Us, Inc., are unchanged, and the outlook is stable.

"The proposed new facility is a credit positive for the company as it will meaningfully reduce interest costs and also adds two years to the maturity, both of which enhance Toys' already good liquidity profile," Moody's vice president Charlie O'Shea said in an agency news release.

"While the proposed new facility remains unsecured, the structure remains favorable, with negative pledges on a pool of properties, a reasonable advance rate and lease assignments."

The agency said the B2 corporate family rating acknowledges the company's weak credit metrics, with debt/EBITDA of around 6.7 times, retained cash flow/net debt of around 9% and EBITA/interest hovering at around 1 time.

The rating also considers Toys' excellent market position as the world's largest dedicated toy retailer, the favorable placing of its solid Babies 'R' Us brand and concept, good liquidity and balanced financial policy, Moody's said.

© 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.