Moody's upgrades William Carter

Moody's Investors Service said it upgraded The William Carter Co.'s corporate family rating and secured bank loan rating to Ba3 from B1. The outlook is stable.

The upgrade reflects the progress that parent company Carter's Inc. has made integrating the debt-financed July 2005 acquisition of OshKosh B'Gosh, Inc. for $320 million. Moody's said the company has been able to achieve expected operating synergies and supply chain improvements while generating positive free cash flow, which has been used to repay more than $100 million of acquisition-related debt since closing.

The agency said the Ba3 ratings reflect the increased scale and diversification of Carter's following the OshKosh acquisition and the strong market profile of the Carter's brand, which has a dominant share in the baby clothing market.

The ratings also reflect the inherent cyclicality in the apparel industry, higher fashion risk associated with the OshKosh business and the narrow focus of the company on the infant and young children's apparel market, Moody's said.

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