Fitch cuts Morrisons

Fitch Ratings said it downgraded Market Holdco 3 Ltd.'s (Morrisons) long-term issuer default rating to B from B+. The agency also lowered Market Bidco Ltd.’s senior secured loans to BB- from BB, Market Bidco Finco plc’s senior secured bonds to BB- from BB and Market Parent Finco plc’s bonds due 2029 to CCC+ from B-,

“The downgrade reflects higher leverage than we previously expected and lower coverage metrics due to higher adjusted debt and lower earnings and free cash flow (FCF) generation. Based on our revised forecasts, we expect EBITDAR leverage to remain above B category medians by FY26,” Fitch said in a press release.

Fitch said it estimates Morrisons' EBITDAR leverage to stay 7.5x-7x in FY23-FY24 before reducing towards 6x in FY25, around 0.5x above the prior rating case, and above its downgrade rating sensitivity thresholds. The outlook is stable.

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