MOODY’S PUTS FEDERATED DEBT UNDER REVIEW

NEW YORK — Approximately $160 million in debt of Federated Department Stores Inc. has been placed under review by Moody’s Investor Service Inc. for a possible upgrade or downgrade due to Federated’s agreement to merge with R.H. Macy & Co. Inc.
The debt is currently rated BA3.
Moody’s stated that the review will focus on the proposed merger’s impact on Federated’s operations, as well as on its cash flow, financial flexibility and bondholder protection measurements.
In particular, the credit-rating agency will be looking at projected capital spending and how it is allocated.
Moody’s said that cash flow should show the benefits “much improved” economies of scale in buying and from overhead cost reduction.
— Fairchild News Service

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