S&P lowers Sotheby's to BB-, notes to B+

Standard & Poor's lowered its corporate credit rating on Sotheby's to BB- from BB. The outlook is stable.

At the same time, S&P lowered its issue-level rating on the company's senior unsecured notes to B+ from BB-. The 5 recovery rating remains unchanged, indicating an expectation for modest recovery in the event of a payment default at the lower end of the 10% to 30% range.

“The downgrade follows Sotheby's guidance for flat full-year earnings compared with the prior year. It also reflects a revised financial risk profile given eroding credit metrics, partly sparked by cyclical factors but also by strategic emphasis on financial services,” said credit analyst Diya Iyer in a news release.

“Sales for Sotheby's and Christie's were down 45% in London this month according to public reports for instance, after a record setting sale of an Amedeo Modigliani piece late last year that could have signaled a market top.”

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