WAL-MART DEBT GETS DOWNGRADE FROM MOODY’S

NEW YORK — Moody’s Investor Service socked Wal-Mart with a downgrade on Wednesday and said the discount giant has been getting subpar returns on its supercenters and international stores.
The ratings on $8.6 billion in debt has been under review since Dec. 12. The ratings cut include senior unsecured obligations, to Aa2 from Aa1 and secured bonds, to Aa2 from Aa1.
Moody’s said Wal-Mart’s supercenters and international formats “have been slower to generate adequate returns” than its “proven” discount format.
Supercenters cash flow will be constrained by its focus on low-margin consumables, while international business “requires substantial funding and increases the company’s risk profile without commensurate growth in cash flow.”

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