Moody’s cuts Thomas Cook

Moody's Investors Service said it downgraded the corporate family rating of Thomas Cook Group plc to Ca from Caa2 and its probability of default rating to Ca-PD from Caa2-PD.

Moody's also downgraded to Ca from Caa2 the rating on Thomas Cook's €750 million senior notes due 2022 and downgraded to Ca from Caa2 its €400 million senior notes due 2023 issued under Thomas Cook Finance 2 plc.

The outlook remains negative.

The agency said the action reflects the announcement that the company is in advanced discussions with Fosun Tourism Group and its affiliates and Thomas Cook's core lending banks to respectively inject new funding of £750 million and exchange a significant amount of the company's existing debt into equity.

The proposed transaction would constitute a default as a distressed exchange under Moody's definitions of default.

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