Moody's lifts Perry Ellis, assigns bonds B2

Moody's Investors Service said it upgraded the corporate family and probability of default ratings of Perry Ellis International, Inc. to B1 from B2, concluding a review for upgrade that began in February.

The agency also said it assigned a B2 (LGD 5, 73%) rating to its $150 million of 7 7/8% senior subordinated bonds due 2019.

The actions follow the company's pricing of its previously announced equity offering with expected net proceeds of about $52.6 million, as well as its pricing of $150 million of 7 7/8% senior subordinated notes due 2019.

The upgrade incorporates expectations for an improved credit profile pro forma for the transactions, Moody's said.

The anticipated repayment of revolver borrowings with equity and bond proceeds will reduce leverage and enhance external liquidity by increasing revolver availability following Perry's utilization of a significant amount of its revolver capacity to fund the acquisition of Rafaella Apparel Group, Inc., the agency said.

Moody's said it will likely withdraw the B3 rating on the existing senior subordinated bonds due 2013 assuming the company repays substantially all of the existing senior subordinated bonds.

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