Moody's downgrades Global Blue

Moody's Investors Service said it downgraded the ratings of Global Blue Finance Sarl, the indirect holding company of Global Blue Acquisition BV, to B3 from B2, including Global Blue's corporate family rating and the senior secured instrument ratings issued at Global Blue Acquisition., a fully-owned and a guaranteed subsidiary of Global Blue, as well as Global Blue's probability of default rating to B3-PD from B2-PD.

“Today's rating action reflects Global Blue's continued weak performance due to coronavirus, consistent with companies operating within the travel, retail and international shopping sectors. This is coupled with Moody's expectations for slower recovery in international travel, as well as Global Blue's highly elevated credit metrics. Moody's further notes that over time, the company's liquidity could be negatively impacted by covenant pressures under the existing debt facilities,” Moody’s said in a press release.

Moody’s said the action also follows the filing of Far Point Acquisition Corp.'s definitive proxy statement concerning Global Blue Group AG's, the ultimate parent of Global Blue Finance, merger with FPAC to be voted on by the shareholders on Monday.

“Closing of the merger as outlined would allow Global Blue to refinance its existing debt comprised of an €80 million revolving credit facility (RCF) due December 2021 and a €630 million term loan B (TLB) due December 2022 with new debt facilities due 2025, thereby extending the company's maturities,” the agency said.

The outlook is negative.

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