Moody’s rates Michael Kors Baa3

Moody's Investors Service said it assigned a Baa3 issuer rating to Michael Kors (USA), Inc., a U.S.-based subsidiary of Michael Kors Holdings Ltd.

The outlook is stable.

On July 25, Michael Kors announced that it will acquire Jimmy Choo plc in a transaction valued at about $1.35 billion. The acquisition is expected to close in the third quarter.

Moody’s said the Baa3 rating reflects the ownership of the well-known Michael Kors brand and its strong market position in the U.S. and Western European women's accessible luxury accessories markets, and growing position the Asia-Pacific region.

“The ratings also reflect the Company's significant industry scale, with pro forma revenue approaching $5.0 billion, and strong credit metric profile, with debt/EBITDA, as per Moody's definition, estimated to be a modest 2.2x for the latest 12-month period pro forma for the acquisition of Jimmy Choo,” Moody’s said in a news release.

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