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House of Fraser in ‘technical default’ on loans, says Moody’s

Credit ratings agency Moody’s has said House of Fraser is in “limited default” of its loans and warned it may be difficult for the struggling department store to borrow money.

Moody’s has downgraded its rating of House of Fraser’s debts for the second time since December over concerns about its ability to refinance, The Guardian reports.

Moody’s said: “In December we downgraded the company as its operating performance was below our expectations due to both challenging market conditions and company specific factors, notably the disruption after the launch of a new web platform, and underperformance of in-house brands.

“Last week we realised that even our lowered expectations will no longer be met and the refinancing risk increased considerably, so we downgraded the company another notch.”

Last week House of Fraser secured the right to add an extra £50m in debts and extended the deadline for repayment of some loans.

Sports Direct owner Mike Ashley held talks with House of Fraser last month over a £50m investment deal.

Chinese investor C Banner said it would delay its £70m investment in House of Fraser until legal proceedings with a group of landlords over its proposed company voluntary arrangement are resolved.

 

Readers' comments (1)

  • Explains why they are discounting heavily and emailing profusely. Cash flow clearly an issue. Getting worse rather than better. Feels like BHS and we know how that ended.

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