Gymboree's Credit Rating Downgraded on Missed Interest Payment Vicki M. Young Ratings agency Moody's Investors Service on Monday downgraded the corporate family rating of children's retailer Gymboree to "Ca" after it failed to make a June 1 interest payment. The retailer said earlier in the year that it would not be making the payment. Specifically, Gymboree said in March that it was getting short on cash, and financial sources last month said that hadn't changed. The move by Moody's follows a similar downgrade on Friday by competing credit ratings firm S&P Global Ratings. The S&P lowered Gymboree's corporate credit rating to "D" from "CC." Both ratings firms said they do not expect the company to make the payment, or any other payments, on its debt obligations. They expect a general default following a 30-day grace period. Moody's also said the "company may have difficulty refinancing its debt without restructuring or impairment to lenders." The S&P said the company is negotiating with lenders and bondholders to restructure its debt. About $872 million of Gymboree's $1.1 billion total debt is due within 12 months. There's been speculation that Gymboree is close to filing a Chapter 11 petition for bankruptcy court protection, and that if one is filed, it would likely be a pre-packaged filing given the current negotiations
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