The ratings on New York City-based luxury retailer Barneys New York Inc. indicate that the company is vulnerable to default, especially given our view that the company will likely need to restructure its balance sheet and that there are significant debt maturities occurring in September 2012. We assess the company's financial risk profile as "highly leveraged" (based on our criteria) because of its substantially leveraged capital structure and very thin cash flow protection measures. Credit measures have remained in line with current levels, and we do not expect a meaningful improvement over the near term. As of July 30, 2011, interest coverage was 0.6x, total debt to EBITDA was 18.0x, and funds from operations to total debt was 2.3%. The...
Companies mentioned in this report are: Barneys New York Inc.
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