14th Aug 2018 12:31
LONDON (Alliance News) - Moody's Investors Service on Tuesday downgraded the corporate family rating of House of Fraser Ltd by three notches to C from Caa2 and said it was ending its coverage of the UK department store chain.
Moody's said the appointment of administrators and the sale of House of Fraser is expected to bring high losses for financial creditors. The ratings agency assumes that the recovery rate for financial creditors across the different debt instruments will be less than 35%, which is consistent with a C corporate family rating.
On Friday last week, following the announcement that House of Fraser was going into administration, Sports Direct International PLC said it had acquired it for GBP90 million in cash. The sports clothing & equipment retailer will buy the business and assets of House of Fraser from the administrators.
Looking ahead, Moody's said that there is no ratings outlook for House of Fraser, and it intends to withdraw all of House of Fraser's ratings. The appointment of administrators is among the defined conditions by Moody's for a default and subsequent withdrawal of ratings.
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