Moody's assigns B3 to J.Crew

Moody's Investors Service said it assigned new ratings for Chinos Intermediate 2 LLC (J.Crew) after it emerged from bankruptcy on Sept. 10, including a B3 corporate family rating, a B3-PD probability of default rating and a B3 rating on the $400 million senior secured exit term loan.

The company's debt capitalization also includes an unrated $400 million exit asset-based revolving credit facility, undrawn as of the emergence date.

“By eliminating 80% of pre-petition debt and reducing its lease obligations, J.Crew has tackled a long overburdened capital structure,” said Raya Sokolyanska a Moody's vice president and senior analyst, in a press release.

“However, significant challenges remain as the company needs to turn around the J.Crew business, invest in its operations and contend with the promotional environment and depressed consumer spending on apparel,” added Sokolyanska.

The outlook is stable.

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