Moody's affirms Warnaco, ups outlook to positive

Moody's Investors Service said it affirmed Warnaco's Ba3 corporate family, Ba1 senior secured and B1 senior unsecured ratings and revised the company's outlook to positive from stable.

The positive outlook reflects the fact that Warnaco's progress in the integration and execution of the January 2006 Fingen SpA acquisition, which gave Warnaco the licensing rights to distribute Calvin Klein jeans, accessories and other apparel in European and Asian markets, has progressed better than initially anticipated, Moody's noted.

According to the agency, upward rating momentum could build if the company continues to demonstrate growth in revenues above peers, indicating improved market share, sustained operating margins approaching 10% and improved free cash flow to debt above 10%.

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