Fitch downgrades BUT

Fitch Ratings said it downgraded Decomeubles Partners SAS’s (BUT) senior secured instrument ratings by one notch to B and removed it from Rating Watch negative following the successful completion of the retailing group’s €66 million tap issue.

The recovery rating for the senior secured debt, which is issued out of BUT’s fully owned subsidiary BUT SAS, also was downgraded to RR3 from RR2.

The downgrades reflect an assumption of lower recoveries for the group’s increased senior secured debt following the tap issue, Fitch said.

The agency said it believes the higher secured debt can be accommodated within BUT’s existing long-term issuer default rating, which was affirmed at B- with stable outlook.

The ratings reflect the company’s aggressive leverage and the competitive market characterized by cautious consumer spending and intensifying competition, Fitch said.

This elevated financial risk profile is balanced by the company’s satisfactory operating profile that benefits from operational scale and strong market and brand position, the agency said.

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