Moody's and S&P Global Ratings downgraded Macy's Inc. on risks associated with the coronavirus outbreak.

In downgrading the senior unsecured debt ratings to Ba1 from Baa3, Moody's noted that the weakness in the company's credit profile, including its exposure store closure, China and consumer sentiment, have left it vulnerable to market sentiment shifts amid the coronavirus outbreak. The rating agency's negative outlook reflects risk that the company's operating performance will remain pressured due to the pandemic.

S&P's downgrade of Macy's issuer credit rating to BB from BB+ was driven by its expectation that coronavirus-driven headwinds such as mass store closures and a downshift in consumer spending for discretionary merchandise will "complicate" the company's turnaround plan and pressure operating performance. As a result, the company may have to amend its maximum leverage covenant.

S&P also revised the outlook to negative from stable to reflect the heightened uncertainty regarding the impact of the coronavirus and impending recession that could impair Macy's ability to reduce leverage to under 4x in 2021 from a spike in 2020.

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This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.