New York, May 10, 2016 -- Moody's Investors Service today affirmed The Gymboree Corporation's ("Gymboree") Caa1 Corporate Family Rating ("CFR") to reflect improved operating performance and debt reduction. However, the company's Probability of Default Rating ("PDR") was changed to Caa1-PD/LD from Caa1-PD to reflect that recent open market repurchases of debt at a significant discount to par value resulted in a material economic loss to lenders, and therefore, constitutes a distressed exchange under Moody's definition of default. Concurrently, Moody's downgraded the company's Secured Term Loan rating to Caa1 from B3, and affirmed the Caa3 Unsecured Note rating. The Company's Speculative Grade Liquidity rating was downgraded to SGL-3 from SGL-2, and the ratings outlook was changed to negative from stable.
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