Moody's introduces new ratings

Moody's Investors Service has introduced two new ratings: probability-of-default ratings and loss-given-default ratings.

The agency's current long-term credit ratings are opinions about expected credit loss that incorporate both the likelihood of default and the expected loss in the event of default. The loss-given-default rating methodology will disaggregate these two key assessments in long-term ratings.

The agency said this methodology will enhance the consistency in its notching practices across industries and will improve the transparency and accuracy of its ratings, as Moody's research shows that credit losses on bank loans have tended to be lower than those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations.

Loss-given-default assessments (or LGDs) are assigned to individual rated debt issues - loans, bonds and preferred stock - and also express Moody's opinion of expected loss as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0%-9%) to LGD6 (loss anticipated to be 90%-100%).

Below is a list of the rating actions for Moody's rated companies, sorted by industry. The rating immediately after the company name denotes the corporate family rating and the percentages next to the LGDs represent the expected loss-given-default rates.

North American retail

Baker & Taylor Acquisitions, B2; probability-of-default: B1; notes, upgraded to B2 from B3, LGD4, 65%.

The Bon-Ton Stores Inc., B1; probability-of-default: B1; notes, downgraded to B3 from B2, LGD5, 83%.

Brookstone Co., Inc., B3; probability-of-default: B3; notes, downgraded to Caa1 from B2, LGD4, 60%.

Brown Shoe Co., Inc., Ba3; probability-of-default: Ba3; notes, B1, LGD5, 73%.

Burlington Coat Factory Warehouse, Inc., B2; probability-of-default: B2; term loan, B2, LGD4, 54%; notes, upgraded to B3 from Caa1, LGD5, 73%.

Dillard's Inc., B1; probability-of-default: B1; notes, B2, LGD5, 71%; preferred beneficial interest debentures, B3, LGD6, 95%.

Dollar General Corp., Ba1; probability-of-default: Ba1; notes, downgraded to Ba2 from Ba1, LGD4, 66%.

Finlay Fine Jewelry Corp., B2; probability-of-default: B2; notes, B3, LGD5, 74%.

Foot Locker, Inc., Ba1; probability-of-default: Ba1; debentures, upgraded to Ba1 from Ba2, LGD4, 60%.

GameStop Corp., Ba3; probability-of-default: Ba3; notes, upgraded to B1 from Ba2, LGD4, 60%.

Leslie's Poolmart, Inc., B2; probability-of-default: B2; notes, downgraded to B3 from B2, LGD4, 63%.

Linens 'N Things, Inc., B3; probability-of-default: B3; notes, B3, LGD4, 56%.

Loehmann's Capital Corp., B2; probability-of-default: B2; class A notes, upgraded to B2 from B3, LGD3, 46%; class B notes, Caa1, LGD5, 89%.

Mothers Work, Inc., B3; probability-of-default: B3; notes, Caa1, LGD4, 64%.

Movie Gallery, Inc., Caa1; probability-of-default: B3; revolver and term loans, upgraded to B3 from Caa1, LGD3, 41%; notes, upgraded to Caa2 from Caa3, LGD5, 88%.

NBC Acquisition Corp., B2; probability-of-default: B2; discount notes, upgraded to Caa1 from Caa2, LGD6, 93%. Nebraska Book Co., Inc., term loan and revolver, upgraded to Ba2 from B2, LGD2, 21%; subordinated notes, upgraded to B3 from Caa1, LGD5, 76%.

The Neiman Marcus Group, Inc., B1; probability-of-default: B1; senior secured term loan and debentures, upgraded to Ba3 from B1, LGD3, 40%; senior unsecured notes, B2, LGD4, 67%; senior subordinated notes, B3, LGD6, 93%.

Payless Shoesource, Inc., Ba3; probability-of-default: Ba3; notes, upgraded to B1 from B2, LGD4, 64%.

Saks Inc., B2; probability-of-default: B2; senior unsecured notes and convertible senior notes, upgraded to B3 from B2, LGD4, 69%.

Savers, Inc., B2; probability-of-default: B2; term loan and revolver, upgraded to Ba3 from B1, LGD2, 27%; notes, Caa1, LGD5, 87%.

Sotheby's, Ba3; probability-of-default: Ba3; notes and, downgraded to B2 from B1, LGD6, 90%; senior unsecured shelf , downgraded to prospective B2 from prospective B1, LGD6, 90%.

Delhaize America, Inc., Ba1; probability-of-default: Ba1; notes and debentures, Ba1, LGD4, 61%.

The Great Atlantic & Pacific Tea Co., Inc., B3; probability-of-default: B3; notes, Caa1, LGD5, 73%; senior unsecured shelf, prospective Caa1, LGD5, 73%; senior subordinated and junior subordinated shelves, prospective Caa2, LGD6, 97%; preferred stock shelf, upgraded to prospective Caa2 from prospective Caa3, LGD6, 97%. A&P Finance I, II and III, trust preferred securities shelf, prospective Caa2, LGD6, 96%.

Ingles Markets, Inc., B1; probability-of-default: B1; notes, B3, LGD5, 80%.

Marsh Supermarkets, Inc., B3; probability-of-default: Caa1; notes, Caa2, LGD5, 72%.

Pathmark Stores, Inc., B3; probability-of-default: B3; notes, upgraded to Caa1 from Caa2, LGD5, 74%.

Stater Bros. Holdings, Inc., B1; probability-of-default: B1; notes, B1, LGD4, 57%.

Supervalu Inc., Ba3; probability-of-default: Ba3; notes, debentures and bonds, upgraded to B1 from B2, LGD4, 60%; senior unsecured shelf, upgraded to prospective B1 from prospective B2, LGD4, 60%. Albertson's, Inc., notes, upgraded to B1 from B2, LGD4, 60%. American Stores Co., notes, upgraded to B1 from B2, LGD4, 60%.

Broder Bros., Inc., B1; probability-of-default: B1; notes, upgraded to B2 from B3, LGD5, 73%.

Cluett American Corp. (Gold Toe), Caa1; probability-of-default: Caa1; notes, upgraded to Caa2 from Caa3, LGD4, 63%; preferred stock, upgraded to Caa3 from Ca, LGD6, 100%.

Kellwood Co., Ba2; probability-of-default: Ba2; notes, Ba3, LGD5, 70%.

Levi Strauss & Co., B2; probability-of-default: B2; notes, B3, LGD4, 59%.

Oxford Industries, Inc., Ba3; probability-of-default: Ba3; notes, B1, LGD5, 75%.

Perry Ellis International, Inc., B1; probability-of-default: B1; notes, B3, LGD5, 78%.

Phillips Van Heusen Corp., Ba3; probability-of-default: Ba3; senior secured notes, upgraded to Ba1 from Ba3, LGD2, 20%; senior unsecured notes, B1, LGD5, 73%.

Quiksilver, Inc., Ba3; probability-of-default: Ba3; notes, upgraded to Ba3 from B1, LGD4, 58%.

Rafaella Apparel Group, Inc., B1; probability-of-default: B1; bonds, B2, LGD4, 60%.

Warnaco Group, Inc., Ba3; probability-of-default: Ba3; revolver and term loan, upgraded to Ba1 from Ba2, LGD2, 22%; notes, B1, LGD5, 78%.

Builders FirstSource, Inc., B1; probability-of-default: B1; revolver, term loan and letter-of-credit facility, upgraded to Ba2 from B1, LGD2, 23%; notes, upgraded to B2 from B3, LGD4, 65%.

Dayton Superior Corp., Caa1; probability-of-default: Caa1; second-priority notes, Caa1, LGD3, 44%; senior subordinated notes, Caa3, LGD5, 85%.

Asbury Automotive, B1; probability-of-default: B1; notes, B3, LGD5, 84%.

AutoNation, Ba1; probability-of-default: Ba1; revolver, term loan and notes, Ba2, LGD5, 84%.

Group 1, Ba2; probability-of-default: Ba2; notes, upgraded to Ba3 from B1, LGD5, 75%; guaranteed senior notes shelf, prospective Ba3, LGD4, 69%; guaranteed subordinated notes shelf, upgraded to prospective Ba3 from prospective B1, LGD5, 75%; preferred stock shelf, upgraded to prospective B1 from prospective B2, LGD6, 97%.

Lazy Days, B2; probability-of-default: B2; notes, B3, LGD4, 68%.

Sonic Automotive, Ba3; probability-of-default: Ba3; revolver, Ba2, LGD3, 31%; subordinated notes, upgraded to B1 from B2, LGD5, 79%; convertible notes, upgraded to B2 from B3, LGD6, 93%.

United Auto, B1; probability-of-default: B1; subordinated notes, B3, LGD5, 81%; convertible notes , B3, LGD6, 92%.

Affinity Group Holding, Inc., B1; probability-of-default: B1; revolver and term loan, upgraded to Ba1 from Ba3, LGD2, 13%; guaranteed senior subordinated notes, upgraded to B2 from B3, LGD4, 61%; senior notes, upgraded to B3 from Caa1, 90%.

Alimentation Couch-Tard, Inc., Ba1; probability-of-default: Ba1; revolvers and term loans, Ba1, LGD3, 47%; notes, Ba2, LGD5, 81%.

Duane Reade, Inc., Caa1; probability-of-default: Caa1; senior secured notes, upgraded to B3 from Caa1, LGD3, 37%; senior subordinated notes, Caa3, LGD6, 90%.

Eye Care Centers of America, Inc., B2; probability-of-default: B2; revolver and term loan, upgraded to Ba2 form B2, LGD2, 22%; notes, Caa1, LGD5, 77%.

General Nutrition Centers, Inc., B2; probability-of-default: B2; revolver, upgraded to Ba2 from B1, LGD1, 4%; term loan, upgraded to Ba2 from B1, LGD2, 13%; senior notes, upgraded to B1 from B3, LGD3, 40%; senior subordinated notes, Caa1, LGD5, 81%.

Harry & David Holdings, Inc., B2; probability-of-default: B2; notes, B3, LGD4, 68%.

The Jean Coutu Group, Inc., B3; probability-of-default: B3; revolver and term loans, upgraded to B1 from B2, LGD2, 25%; senior notes, B3, LGD4, 57%; senior subordinated notes, Caa2, LGD5, 84%.

Jo-Ann Stores, Inc., B1; probability-of-default: B1; notes, B3, LGD5, 80%.

The Pantry Inc., B1; probability-of-default: B1; revolver and term loan, upgraded to Ba2 from Ba3, LGD2, 28%; notes, B3, LGD5, 77%.

Rent-A-Center, Inc., Ba2; probability-of-default: Ba2; revolver and term loans, upgraded to Ba1 from Ba2, LGD3, 32%; notes, Ba3, LGD5, 83%.

Rent-Way, Inc., B3; probability-of-default: B3; notes, B3, LGD4, 54%.

Rite Aid Corp., B2; probability-of-default: B2; second-lien secured notes, B2, LGD4, 52%; senior notes, Caa1, LGD5, 89%; convertible notes, Caa1, LGD5, 89%.

Susser Holdings, LLC, B2; probability-of-default: B2; notes, downgraded to B3 from B2, LGD4, 69%.

Vitamin Shoppe Industries, Inc., B3; probability-of-default: B3; notes, downgraded to B3 from B2, LGD4, 52%.

CSK Auto, Inc., B1; probability-of-default: B1; term loan, Ba3, LGD3, 39%; convertible notes, upgraded to B3 from B1, LGD5, 81%; notes, B3, LGD6, 97%.

Dollarama Group LP, B1; probability-of-default: B1; revolver and term loans, upgraded to Ba2 from B1, LGD2, 23%; notes, upgraded to B2 from B3, LGD5, 71%.

FTD, Inc., B1; probability-of-default: B1; revolver and term loan, upgraded to Ba2 from Ba3, LGD2, 24%; notes, B3, LGD5, 79%.

Gregg Appliances, Inc., B2; probability-of-default: B2; notes, B2, LGD4, 57%.

OfficeMax, Inc., Ba2; probability-of-default: Ba2; notes, upgraded to Ba3 from Ba2, LGD4, 67%. American Foreign Power, debentures, downgraded to Ba3 from Ba2, LGD4, 67%.

Sears Canada, Inc., Ba1; probability-of-default: Ba1; bonds, revolver and term loan, upgraded to Baa3 from Ba1, LGD3, 36%. Sears Holdings Corp., Ba1; probability-of-default: Ba1; revolver, Baa3, LGD2, 24%. Sears DC Corp., notes, downgraded to Ba2 from Ba1, LGD6, 97%. Sears Roebuck Acceptance Corp., notes, downgraded to Ba2 from Ba1, LGD5, 72%.

Toys 'R' Us, Inc., B2; probability-of-default: B2; notes, upgraded to Caa1 from Caa2, LGD6, 93%. Toys 'R' Us - Delaware, Inc., term loans, upgraded to Ba3 from B1, LGD3, 31%; debentures, downgraded to B3 from B2, LGD5, 71%. TRU 2005 RE Holding Co. I, LLC, revolver, downgraded to B3 from B2, LGD5, 71%.

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