Moody's downgrades New Look

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

Moody's said it downgraded the rating of the £700 million and the €415 million senior secured notes due in July 2022 issued by New Look Secured Issuer plc to Caa3 from Caa1, along with the rating on its £176 million outstanding senior unsecured notes due in July 2023 to C from Ca.

The outlook remains negative.

The downgrades reflect New Look's inadequate liquidity profile and the unlikely financial support from its owner, Brait SE, which will lead to a restructuring of the company's unsustainable capital structure, Moody's said.

Although the strategic plan put in place by the new senior management team is improving the operating performance, EBITDA will not grow rapidly enough to refinance the current capital structure on reasonable terms and without significant financial losses for bondholders, the agency said.

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