The debt watchdogs are keeping a close eye on Sycamore Partners’ $2.2 billion deal to buy The Jones Group Inc.

This story first appeared in the December 23, 2013 issue of WWD. Subscribe Today.

Both Moody’s Investors Service and Standard & Poor’s put their ratings on Jones’ debt on review for possible downgrade, noting the buyout could load Jones down with additional debt and lead to changes at the company. Moody’s rates Jones at “Ba3,” while S&P scores the company at “BB-minus.” The ratings are each three steps into non-investment-grade or “junk” territory.

Sycamore, which is led by Stefan L. Kaluzny, agreed last week to buy Jones for $15 a share, or $1.2 billion, plus another $1 billion in debt. Kaluzny is expected to break up Jones into four parts: the legacy footwear business and the denim business; an apparel company including Jones New York; Kurt Geiger, and Stuart Weitzman.

And while it’s not clear where Jones’ top leaders will stand in the new corporate structure, they will see nice payouts for their stock holdings.

Chief executive officer Wesley Card holds 1.4 million shares of Jones, mostly in restricted stock, valued at $20.3 million at the takeover price, according to regulatory filings. And Richard Dickson, president and ceo of the branded businesses, holds 930,124 shares, valued at $14 million. Together the two executives own 2.9 percent of the company and agreed to vote their shares in favor of the deal.

The takeover, which is expected to be completed in the second quarter, brings a good deal of uncertainty to the business.

“While we do not know what the composition of the capital structure will be following the transaction, we believe the company’s credit metrics could weaken if its financial sponsor influences financial governance toward shareholder-friendly strategies and the use of debt or debtlike instruments to maximize shareholder returns,” said Linda Phelps, a credit analyst at S&P.

Card sent a letter to employees after the deal was cut on Thursday noting that: “Today’s announcement will have no impact on your day-to-day responsibilities — it remains business as usual at The Jones Group.”

The letter included a list with questions it anticipated from its workers, including whether or not the deal would lead to layoffs.

“It is premature to speculate on this,” Jones said in its official answer. “Sycamore Partners will work with our management team and we will continue in our efforts to become more efficient and improve the company’s profitability. We are always looking at ways to restructure and become more efficient, as well as continue to deliver exceptional products.”