Moody's smiles on Saks
January 22, 2004-- Home Textiles Today,
NEW YORK — Moody's Investors Service, one of the three big corporate credit-rating agencies, has boosted its ratings on department store retailer Saks Inc., citing stabilization of market share and improving margins.
Moody's lifted its ratings on about $1.2 billion in Saks debt securities to Ba3 from a prior rating of B1.
Further supporting the stronger rating, Moody's cited reduction in leverage from "sustained improvements in store operating profitability" and debt reduction from cash flow. Moody's also applauded the sale of the company's credit-card-receivables portfolio and its ability to fund its growth and working capital needs from internally generated cash flow and cash balances.
The ratings agency also said it liked fixed charge coverage levels, which are strong for the rating category, and "highly satisfactory liquidity; modest upcoming debt maturities; and the company's unencumbered real estate."
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