S&P reviews Matalan, rates notes

S&P said it placed the CCC+ long-term corporate credit rating on Missouri Topco Ltd. on CreditWatch with positive implications.

Missouri Topco is the holding company of Matalan.

The agency also assigned a B- rating to the proposed £330 million senior secured first-lien notes to be issued by Matalan Finance plc, the group's financing vehicle.

The recovery rating on these notes is 3, indicating 50% to 70% expected default recovery.

In addition, S&P assigned a CCC rating to the proposed £150 million second-lien senior secured notes to be issued by Matalan Finance. The recovery rating is 6, indicating 0 to 10% expected default recovery.

S&P also said it placed the CCC+ rating on the existing £342 million first-lien senior secured notes issued by Matalan Finance on CreditWatch positive and revised the recovery rating to 3 from 4, indicating 50% to 70% expected default recovery.

Furthermore, the agency placed the CCC- rating on the group's £150 million senior subordinated second-lien notes on CreditWatch positive. The recovery rating is unchanged at 6, indicating 0 to 10% expected default recovery.

S&P said the CreditWatch placement reflects the likelihood that the agency could raise the long-term rating on Matalan by one notch if the group successfully completes the proposed refinancing.

The agency anticipates the transaction will result in no significant changes in total debt and cash interest burden. The agency also expects that the robust operating performance of recent quarters will continue in the next few years.

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