MOODY’S CUTS RATING ON TJX DEBT
NEW YORK — Moody’s Investors Service has lowered the debt ratings of TJX Cos. as a result of the $550 million debt-financed purchase of Marshall’s Inc. from Melville Co.
Moody’s said the increased debt level has weakened TJX’s financial flexibility and its debt coverage ratios. While conceding that the purchase will strengthen the position of TJX in the “fiercely competitive and difficult U.S. apparel market,” Moody’s said the retailer continues to face soft apparel sales, apparel price deflation and competition from department stores and other large retailers that have succeeded in reducing their cost structures.
Moody’s said it expects TJX to make steady progress in improving its ratios but warns that “delay in improving bondholder protection measures could result in a further rating adjustment.”
Moody’s lowered TJX senior unsecured ratings to Baa3 from A3; two convertible preferred issues to ba2 from baa1, and the firm’s commercial paper to Prime 3 from Prime 2. — Fairchild News Service