Moody’s places Bon-Ton ‘under review’
October 27, 2008-- Home Textiles Today,
York, Pa. – The management of The Bon-Ton Stores told HTT it planned no statement regarding last Friday’s announcement by Moody’s Investors Service that it had placed the ratings of the retailer “under review for possible downgrade.”
The items under review includes Bon-Ton’s B2 corporate family rating, probability of default rating at B2 and $510 million of senior unsecured notes at Caa1, according to Moody’s.
The rating service pointed to the challenge of the company to maintain “financial flexibility in light of the current, very soft economic environment.” Moody’s added, “This is very important in the near term given that the holiday season accounts for the vast majority of the company’s annual earnings and cash flow.”
The event that precipitated the review, Moody’s said, was the recent adjustment downward by 281-store Bon-Ton of its outlook for the year.
While under review, there has been no downgrade, and Bon-Ton management reiterated to HTT the points made in its recent presentation to the financial community: that it has reduced its debt and currently has “excellent” direct relationships with vendors and factors.