Moody's lowers Debenhams

Moody's Investors Service said it downgraded the long-term corporate family rating of Debenhams plc to B2 from B1.

Moody's also said it downgraded the probability of default rating to B2-PD from B1-PD and the senior unsecured ratings on the £200 million notes due in 2021 to B2 from B1.

The outlook was revised to negative from stable.

The downgrades reflect the company's weaker-than-expected profitability and resultant deterioration in credit metrics to levels inconsistent with the B1 rating, Moody's said.

The negative outlook factors in the possibility of a further drop in profits or weaker liquidity, the agency said.

The ratings also consider the highly competitive and promotional environment in the U.K., but also the company's established market position and portfolio of well-invested department stores, Moody's said.

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