Moody's drops Jo-Ann, notes

Moody's Investors Service said it downgraded Jo-Ann Stores Holdings Inc.'s corporate family rating to B3 from B2, probability of default rating to B3-PD from B2-PD and senior unsecured notes to Caa2 from Caa1.

The agency affirmed the ratings on Jo-Ann Stores, LLC's secured term loan and unsecured notes and updated the loss-given default point estimates to reflect the current debt mix.

The outlook is stable.

Moody's said the downgrade reflects its expectation that Jo-Ann's lease adjusted leverage will remain in excess of 6.5 times, as a continuation of soft operating performance trends experienced since the company's October 2012 leveraged dividend are expected to continue to weigh on credit metrics.

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