S&P cuts GOME Retail

S&P said it lowered its long-term issuer credit rating on GOME Retail Holdings Ltd. to B+ from BB- and lowered the long-term issue rating to B from B+ on the company's US$500 million senior unsecured notes.

The outlook is negative, reflecting an expectation of potential downside to GOME's operating performance over the next 12 months due to uncertainty around the company's turnaround strategy in a challenging market environment, S&P said.

“Our downgrade and negative outlook on GOME Retail Holdings Ltd. (GOME) reflects our view that the company’s operating performance is worsening amid intensifying online competition. As such, we expect the retailer's debt leverage to remain high at above 5x in the next 12 months,” S&P said in a news release.

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