S&P rates Missouri TopCo notes B-, CCC

Standard & Poor’s said it revised to stable from negative its outlook on Missouri TopCo Ltd. (Matalan) and affirmed its B- long-term corporate credit rating on Matalan.

At the same time, S&P assigned a B- issue rating to the £342 million senior secured notes issued by Matalan Finance. The recovery rating on these notes is 3, reflecting an expectation of meaningful (50%-70%) recovery for senior secured noteholders in the event of a default.

Finally, S&P assigned a CCC issue rating to the £150 million second-lien notes issued by Matalan Finance plc. The recovery rating on these notes is 6, reflecting an expectation of negligible (0%-10%) recovery prospects in the event of a default.

In addition, S&P withdrew the B issue rating on the £250 million senior secured notes and CCC issue rating on the £225 million senior unsecured notes issued by Matalan Finance plc.

S&P said the outlook revision reflects Matalan’s proactive refinancing of its revolving credit facility and existing notes, which has improved headroom under its revolver covenants, lowered interest costs and extended its debt maturity profile.

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