Moody's rates J.Crew's loan Ba3

Moody's Investors Services said it has assigned a prospective Ba3 rating to J. Crew Group Inc.'s proposed $295 million senior secured term loan and is continuing the review for possible upgrade on the company's current B3 corporate family and other ratings, including its Caa2 senior discount notes.

The new term loan facility is being put in place as a part of a recapitalization that will include an initial public offering.

Moody's said the rating reflects the anticipated improvement in the company's credit metrics following the IPO and the planned utilization of these proceeds to pay down debt.

The rating also incorporates the substantial improvement in operating performance that has occurred over the past 18 months as a result of enhancements to its merchandise offerings, greater operating discipline and improved customer service, Moody's said.

Upon the closing of the IPO, the corporate family rating will likely be upgraded to Ba3, Moody's said.

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