Moody's puts Signet on review

Moody's Investors Service said it placed Signet UK Finance plc's unsecured regular bond debenture rating of Baa3 on review for downgrade.

The review is prompted by news that Signet reached an agreement to outsource its prime credit card portfolio and that it intends to outsource its funding of its remaining subprime exposure, which is in excess of 10% of its fiscal 2017 sales, Moody's said.

The review also will consider its weak financial results relative to the jewelry category, the agency said.

Signet's extension of credit is integral to driving sales and its customer relationships, particularly with its bridal customers, Moody's said.

While the company has reach a favorable agreement to outsource the prime portion of its portfolio, there are potential costs and risks to outsourcing credit to its subprime customers on similar terms to those currently provided, the agency said.

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