Moody's downgrades Morrisons

Moody's Investors Service said it lowered Wm Morrison Supermarkets plc to a corporate family rating Ba1 from an issuer rating Baa2.

Concurrently, the agency assigned a Ba1 CFR and a Ba1-PD probability of default rating to the company.

Moody's also downgraded to (P)Ba1 rating from the (P)Baa2 backed senior unsecured MTN rating of its fully-owned subsidiary Safeway Ltd.; to (P)Ba1 from the (P)Baa2 backed senior unsecured MTN, and to Ba1 from the Baa2 backed senior unsecured ratings of all the bonds issued under the program by Wm Morrison Supermarkets.

About £264 million of the bonds remain outstanding after Clayton Dubilier & Rice’s recent tender offer, the agency said.

“The downgrade of Morrisons' issuer rating was triggered by the acquisition of the entirety of the company by Clayton Dubilier & Rice (CD&R) for an enterprise value of around £9.7 billion. The acquisition was financed through a combination of equity capital, including ordinary and preference shares, and credit facilities that are expected to be refinanced through long term debt. Moody's considers that the acquisition of the company by CD&R has now been completed,” the agency said in a press release.

The outlook on both entities remains under review for further downgrade.

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