Moody’s lowers New Look, notes

Moody's Investors Service said it downgraded New Look Retail Group Ltd.’s corporate family rating to B3 from B2 and probability of default rating to B3-PD from B2-PD.

"Our decision to downgrade New Look reflects the likelihood that, after deteriorating during 2016, profitability will remain weak over the next 12 to 18 months, as the company seeks to regain market share in a retail environment that we expect to remain challenging," David Beadle, Moody's vice president, senior credit officer and lead analyst for New Look, said in a news release.

At the same time, the agency downgraded New Look Secured Issuer plc’s £700 million and the €415 million senior secured notes due in July 2022 to B2 from B1 and the roughly £177 million outstanding senior unsecured notes due in July 2023 to Caa2 from Caa1.

The outlook on all ratings is stable.

Moody’s said the downgrade reflects New Look's higher leverage and lower interest coverage than the agency previously considered appropriate for a B2 corporate family rating, coupled with the expectation that meaningful improvement in credit metrics is unlikely over the next 12 to 18 months.

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