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Moody’s to withdraw House of Fraser rating

Credit ratings agency Moody’s has downgraded House of Fraser by three notches and will withdraw all of its ratings to reflect the “high expected losses” for financial creditors as a result of its pre-pack sale to Sports Direct last week.

The ratings agency said the corporate family rating of House of Fraser has been downgraded to C from Caa2, and the probability of a default rating has shifted from Caa2-PD to D-PD.

Moody’s has also downgraded the rating of the £165m senior secured floating rate notes that are due by October 2020 from C to Caa2.

It said its base case scenario 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.

The appointment of administrators is among the defined conditions by Moody’s for a default and subsequent withdrawal of ratings.

 

 

 

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