Moody's rates Warnaco loan Ba1

Moody's Investors Service said it assigned a Ba1 rating to Warnaco Inc.'s proposed $200 million seven-year term loan B.

Warnaco Inc. is a wholly owned subsidiary of the Warnaco Group, Inc.

Warnaco's Ba1 corporate family and probability of default ratings were affirmed.

The agency also said it placed the ratings on its asset-based revolving credit facilities on review for possible upgrade.

The outlook remains stable.

The proceeds of the term loan will be used for general corporate purposes, which include funding internal growth and acquisitions, repaying indebtedness and funding equity purchases, Moody's said.

The review for possible upgrade of the asset-based credit facilities reflects the additional loss absorption that would be available for the asset-based lenders, the agency said.

The ratings are supported by the company's solid market position, strong credit metrics and good liquidity, as well as broad channel diversification, the agency said.

The ratings also are supported by the company's good operating margins and its track record of consistent organic growth primarily fueled by strong international growth of the company's Calvin Klein Jeans and Calvin Klein Underwear businesses, Moody's said.

The ratings are constrained by its narrow product focus, high concentration on the reputation and image of the Calvin Klein brand and the susceptibility to weakness in discretionary consumer spending inherent in the apparel industry, the agency said.

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