Moody's Investors Service upgraded Wolverine World Wide, Inc.'s corporate family rating to Ba2 from Ba3 and also upgraded the company's probability of default rating to Ba2-PD from Ba3-PD. Moody's also upgraded the rating assigned to the company's $375 million senior unsecured notes due 2020 to Ba3 from B2. The company's speculative grade liquidity rating was affirmed at SGL-1.
The rating outlook is stable.
“The upgrade reflects Wolverine's continued meaningful reduction in debt with net debt falling below $900 million at the end of the second quarter of 2014, its lowest level since the October 2012 acquisition of the Performance+Lifestyle Group (“PLG”)” said Moody's Vice President Scott Tuhy. He added “Wolverine has now substantially integrated the PLG acquisition and we expect the Company will maintain stable to moderately growing earnings across its large portfolio of brands as a whole for the near to intermediate term.”
The upgrade also considers the positive impact anticipated from the company's recently-announced strategic realignment plan, which is expected to result in the closure of up to 140 retail stores, mostly under the Stride Rite brand. The initiative is likely to result in improved returns on capital and incremental funding of the company's continuing omni-channel initiatives.
