Fitch assigns Macy's notes BBB-

Fitch Ratings said it assigned a BBB- rating to Macy's, Inc.'s new $650 million 7.875% senior unsecured notes due 2015 issued through its wholly owned subsidiary Macy's Retail Holdings, Inc.

The notes are guaranteed by Macy's, Inc., the agency said, adding that proceeds from the offering will be used for general corporate purposes, which include refinancing upcoming 2008 maturities - $500 million notes due September 2008 and $150 million notes due November 2008.

The bonds include change of control and coupon step-up provisions, the agency noted.

The outlook is stable.

Fitch added that the rating reflects Macy's strong operating margins relative to its industry peers, slow store expansion and relatively low reinvestment needs in the existing store base that enables the company to generate strong free cash flow.

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