S&P changes Iceland Foods to stable

Standard & Poor's said it revised its outlook on Iceland Topco Ltd. (Iceland Foods), the parent company of Iceland Foods Group Ltd., to stable from positive.

At the same time, the agency affirmed its B+ long-term corporate credit ratings on Iceland Foods. It affirmed its B+ issue rating on the group's £950 million senior secured notes. The recovery rating on the notes is 3, indicating an expectation of meaningful (50%-70%) recovery prospects in the event of a payment default.

Finally, S&P affirmed its BB issue rating on the group's £30 million super senior revolving credit facility. The recovery rating on the revolver is 1, indicating an expectation of very high (90%-100%) recovery prospects in the event of a payment default.

S&P said the actions reflect its view that Iceland Foods will continue to face difficult trading conditions over the new few quarters. It believes that Iceland Foods’ lower-than-expected profitability and pressure on the group's top line will likely endure, or even intensify, over 2015.

S&P also anticipates that the tough trading environment will continue to translate into negative like-for-like sales, the agency said.

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