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Macy’s Inc. got a key investment-grade nod from Standard & Poor’s, which boosted its corporate family credit rating on the department store one notch to “BBB-minus” from “BB-plus.”
That puts Macy’s “junk” bonds days mostly behind it. Two of the three major rating agencies have given the chain investment-grade ratings, making it easier and cheaper for the company to borrow money.
Fitch Ratings also rates Macy’s debt “BBB-minus.” Moody’s Investors Service has the company at “Ba1” — one notch from investment grade on its scale — with a positive outlook.
“The upgrade, which returns the rating to investment grade after an approximate two-year gap, reflects the company’s continued robust performance and a significant moderation of its historically aggressive financial policy with targets that are now commensurate with an investment-grade rating,” said S&P credit analyst David Kuntz.
The upgrade follows word last week that Macy’s first-quarter profits rose fivefold to $131 million on a 5.7 percent gain in sales.
Prior to the afternoon debt upgrade, shares of Macy’s gained 2.8 percent to $29.20.
The company outperformed the S&P Retail Index, which rose 0.5 percent, or 2.57 points, to 539.53, and the Dow Jones Industrial Average, which increased 0.7 percent, or 80.60 points, to 12,560.18.
