Rating Action: Moody's downgrades Men's Wearhouse's PDR to D-PD following Chapter 11 filing
Global Credit Research - 04 Aug 2020
New York, August 04, 2020 -- Moody's Investors Service, ("Moody's") downgraded The Men's Wearhouse, Inc. ("Men's Wearhouse") ratings, including its probability of default rating ("PDR") to D-PD from Caa2-PD, corporate family rating to Ca from Caa2, senior secured term loan rating to Ca from Caa2, and unsecured notes to C from Ca. The speculative-grade liquidity rating was downgraded to SGL-4 from SGL-3 and the ratings outlook was changed to stable from negative. Today's actions follow the company's announcement  that it has filed for protection under Chapter 11 of the US Bankruptcy Code.
..Issuer: Men's Wearhouse, Inc. (The)
.... Probability of Default Rating, Downgraded to D-PD from Caa2-PD
.... Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3
.... Corporate Family Rating, Downgraded to Ca from Caa2
....Senior Secured Bank Credit Facility, Downgraded to Ca (LGD4) from Caa2 (LGD4)
....Senior Unsecured Regular Bond/Debenture, Downgraded to C (LGD6) from Ca (LGD6)
..Issuer: Men's Wearhouse, Inc. (The)
....Outlook, Changed To Stable From Negative
"The global coronavirus pandemic severely disrupted Tailored Brands' businesses, which were already facing challenges due to execution issues and a challenging retail environment," stated Moody's retail analyst, Mike Zuccaro. "Its Chapter 11 filing, which has support of over 75% of its senior lenders, will allow the company to reduce debt, rationalize its store base, and focus on executing its plan to drive profitable growth."
The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil prices, and high asset price volatility have created an unprecedented credit shock across a range of sectors and regions. We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. Today's action reflects the impact on Men's Wearhouse of the deterioration in credit quality it has triggered, given its exposure to men's apparel, which has left it vulnerable to shifts in market demand and sentiment in these unprecedented operating conditions.
Subsequent to today's actions, Moody's will withdraw the ratings due to Men's Wearhouse's bankruptcy filing. Please refer to the Moody's Investors Service Policy for Withdrawal of Credit Ratings, available on its website, www.moodys.com.
Men's Wearhouse, Inc. is a subsidiary of Tailored Brands, Inc., which operates around 1,445 stores in the U.S. and Canada under the Men's Wearhouse, Jos. A. Bank, Moores Clothing for Men and K&G brands. LTM revenue for the period ended May 2, 2020 approached $2.8 billion
The principal methodology used in these ratings was Retail Industry published in May 2018 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1120379. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.
The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.
These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.
Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.
At least one ESG consideration was material to the credit rating action(s) announced and described above.
The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.
 Form 8-K (SEC) 03-Aug-2020
Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.
Michael M. Zuccaro Vice President - Senior Analyst Corporate Finance Group Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Margaret Taylor Associate Managing Director Corporate Finance Group JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A. JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653
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