Moody's lowers Michael Kors

Moody's Investors Service said it downgraded Michael Kors (USA), Inc.'s senior unsecured rating to Ba1 from Baa3. Moody's also assigned the company a Ba1 corporate family rating, Ba1-PD probability of default rating and a speculative grade liquidity rating of SGL-2. The outlook was changed to negative from stable.

"The downgrade with a negative outlook reflects that Michael Kors has been unable to reduce leverage to the levels originally forecasted at the time of the Versace acquisition. It also reflects the anticipated disruption from the COVID-19 virus in the face of unprecedented temporary store and mall closures," said, Christina Boni, a Moody’s vice president, in a press release.

" Nonetheless, its recent bank amendment to extend all but $48 million of its November 2020 term loan maturity to November 2023 improves its liquidity, " Boni added.

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