S&P trims Debenhams

S&P said it lowered its long-term issuer credit rating on Debenhams plc to B- from B. The outlook remains negative.

At the same time, S&P lowered its long-term issue rating on the £225 million senior unsecured notes (of which £200 million remain outstanding) to B- from B, in line with the issuer credit rating. The recovery rating on these notes is unchanged at 3, reflecting an expectation of average recovery (50%-70%; rounded estimate: 60%) in the event of default.

“The downgrade reflects our view that although on a cash flow basis, the results were broadly in line with our expectations, we think that Debenhams' operating performance and cash flow generation prospects are now weaker than we had previously anticipated and more volatile in the context of its high lease-adjusted leverage,” S&P said in a news release.

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