S&P rates Hudson’s Bay loan BB

Standard & Poor’s said it assigned a BB rating and 1 recovery rating to Hudson’s Bay Co.’s proposed $1.085 billion term loan B.

S&P also said it corrected the rating on the debt by placing the rating on CreditWatch with negative implications, consistent with the CreditWatch implications on the corporate credit rating on Hudson’s Bay.

The 1 recovery rating indicates 90% to 100% expected default recovery.

The recovery expectations on the company’s U.S.- and Canadian-real estate and pro forma capital structure following the recent repayment of its term loan using proceeds from its real estate joint ventures net of any mortgage debt at the company’s properties.

The proceeds from the issuance will fund corporate purposes, which could include the partial funding of the acquisition of two department store chains from Metro AG.

All of the ratings on the company and its related entities, including its B+ corporate credit rating, remain on CreditWatch with negative implications.

If the company completes the real estate joint ventures and equity issuance as proposed, the agency said it will likely affirm the corporate credit rating.

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