Amended - Fitch Rates Macy's $650MM Senior Unsecured Notes 'BBB-'; Outlook Stable

NEW YORK--(BUSINESS WIRE)--(This is an amended version of the release that went out earlier today; it updates the issuer name to Macy's Retail Holdings.)

Fitch Ratings has assigned a 'BBB-' rating to Macy's, Inc.'s (Macy's) new $650 million 7.875% senior unsecured notes due 2015 issued through its wholly owned subsidiary Macy's Retail Holdings, Inc. The notes are guaranteed by Macy's, Inc. Proceeds from the offering will be used for general corporate purposes, which include refinancing upcoming 2008 maturities ($500 million notes due September 2008 and $150 million notes due November 2008). The bonds include change of control and coupon step-up provisions. The Rating Outlook is Stable.

The rating reflects Macy's strong operating margins relative to its industry peers, slow store expansion and relatively low reinvestment needs in the existing store base that enables the company to generate strong free cash flow. This is balanced against the highly competitive and challenging operating environment and weakness in the top line. In the near to medium term, Fitch anticipates leverage ratios to increase from current levels as Macy's operating performance remains pressured due to the expected softness in comparable store sales.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

Fitch Ratings
Monica Aggarwal, CFA, 212-908-0282 (New York)
Tiffany Co, 312-368-3185 (Chicago)
Brian Bertsch, 212-908-0549 (Media Relations, New York)