Rating Action:
Moody's downgrades 99¢ Only Stores LLC CFR to Caa1, outlook remains negative
Global Credit Research - 29 Jan 2016
New York, January 29, 2016 -- Moody's Investors Service today downgraded the Corporate Family Rating and Probability of Default Rating of 99 Cents Only Stores LLC to Caa1 and Caa1-PD from B3 and B3-PD respectively. Moody's also downgraded the ratings of the company's senior secured term loan to Caa1 from B3 and its senior unsecured notes to Caa3 from Caa2. In addition, the company's Speculative Grade Liquidity Rating is lowered to SGL-4 from SGL-3. The rating outlook remains negative.
"99¢ Only Stores' liquidity profile is weak and operating performance continues to be challenged with declining same store sales, margins and earnings which has resulted in the weakening of credit metrics to levels that are not consistent with current ratings", Moody's Senior Analyst Mickey Chadha stated. "Although operating results could stabilize as the new management team implements certain strategic initiatives, we expect credit metrics and liquidity to remain weak for the next 12 months", Chadha further stated.