Moody’s lowers New Look, notes

Moody's Investors Service said it downgraded New Look Retail Group Ltd.’s corporate family rating to Caa2 from Caa1 and probability of default rating to Caa2-PD from Caa1-PD.

The agency also downgraded the ratings of the £700 million and the €415 million senior secured notes due in July 2022 issued by New Look Secured Issuer plc to Caa1 from B3 and the rating of the roughly £177 million outstanding senior unsecured notes due in July 2023 issued by New Look Senior Issuer to Ca from Caa3.

The outlooks on all ratings were changed to negative from stable.

"Our decision to downgrade New Look's ratings reflects our expectations that, after a particularly weak second quarter, results in the second half of the company's fiscal year will also fall well short of last year. Following changes to the senior management team, New Look is seeking to refocus on its historic value-based broad appeal,” David Beadle, Moody's vice president, senior credit officer and lead analyst for New Look, said in a news release.

“However, this strategy will take time, and the path towards a meaningful recovery in profitability is uncertain. Therefore, the negative outlook on the company's ratings reflects the risk that, despite the company's currently adequate liquidity, the capital structure may in due course prove unsustainable."

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