OREANDA-NEWS. S&P Global Ratings today it assigned its 'A+' issue-level rating to TJX Cos. Inc.'s proposed $750 million senior unsecured notes due 2026. The company is issuing these notes under its shelf registration. We understand the company will use net proceeds to redeem its $375 million 6.95% notes due 2019 and for working capital and general corporate purposes. Pro forma for the debt repayment and additional debt, our forecast for leverage over the next year is relatively unchanged at around 1.1x.

TJX is the leading off-price retailer with consistent performance trends, diversified store banner, and geographic scope. It continues to solidly execute its merchandise strategies, which has allowed it to expand its customer base that includes more middle income customers as well as consumers in the younger, millennial demographic seeking value. As such, we think its customer loyalty has increased, contributing to positive growth in same-store sales and profit margins that we expect to continue. TJX maintains robust credit protection measures with solid and consistent cash flow generation, as well as strong liquidity. We think a risk to the company sound performance and financial position is poor merchandising execution or a sizeable increase in debt relative to profits and cash flows, though we do not anticipate such scenarios to occur in the next one to two years.

For our detailed research report on TJX, please see our summary analysis dated June 14, 2016.