Credit ratings agency Moody’s has upgraded New Look’s corporate family rating and probability of default rating, following the completion of its restructuring plan.
New Look’s corporate family rating has been upgraded from Caa3 to Caa2, while its probability of default rating has improved from Ca-PD to Caa2-PD/LD.
Moody’s has placed the ratings on review for further upgrade. This will focus on the analysis of the company’s business plan, as well as its new capital structure and future liquidity profile.
New Look announced last week that it had successfully slashed its long-term debt by 80% from £1.4bn to £350m and repaid its £80m bridge facility.
Moody’s senior vice-president and lead analyst for New Look, Roberto Pozzi, said: “While we saw New Look’s distressed exchange as a default, the subsequent financial restructuring has significantly improved its leverage to 7.7x from 12.3x, triggering today’s upgrade.”
In its most recent trading update, New Look returned to a group operating profit of £38.5m for the 39 weeks to 22 December 2018, from an operating loss of £5.1m in same period in 2017.