November 26, 2012 / 7:15 PM / 5 years ago

TEXT-S&P rates PVH Corp debt 'BBB-'

Nov 26 - Standard & Poor's Ratings Services said today that it assigned its
'BBB-' secured debt rating to New York-based PVH Corp.'s proposed $3.825
billion secured credit facility, one notch above the corporate credit rating.
The facility consists of a five-year $750 million revolver, a five-year $1.2
billion term loan A, and a seven-year $1.875 billion term loan B. At the same
time, we are assigning our '2' recovery rating to the secured credit facility,
reflecting our expectations of substantial (70%-90%) recovery for the lenders in
case of a payment default.

We expect the company to use net proceeds from this debt issuance to partially 
finance its pending roughly $2.9 billion acquisition of Warnaco Group Inc. We 
expect the transaction to be completed during the first quarter of 2013.

Our ratings on PVH, including our 'BB+' corporate credit rating, reflect our 
view that the company's financial profile will continue to be "significant" 
following completion of the Warnaco acquisition, when the company will have a 
high level of debt, with pro forma debt-to-EBITDA leverage in the low- to 
mid-4x area. In addition, we believe the company's financial policy continues 
to be moderate, particularly as we expect the company to aggressively reduce 
acquisition-related debt with cash flow from operations consistent with past 
practices. In addition, we believe the company's business risk profile 
continues to be "satisfactory," reflecting the corporation's good market 
position as one of the larger apparel companies, its portfolio of 
well-recognized brands, and its growing geographic diversification. 

     -- Methodology And Assumptions: Liquidity Descriptors For Global 
Corporate Issuers, Sept. 28, 2011 
     -- Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008

PVH Corp.
 Corporate credit rating               BB+/Stable/--

Ratings Assigned
PVH Corp.
 Senior secured
  Five-year $1.2 bil. term loan A      BBB-
    Recovery rating                    2
  Five-year $750 mil. revolver         BBB-
    Recovery rating                    2
  Seven-year $1.875 bil. term loan B   BBB-
    Recovery rating                    2
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