Moody’s downgrades General Shopping

Moody's Investors Service said it downgraded the senior unsecured ratings of General Shopping Finance Ltd. to B2 from B1 and the subordinated debt rating of General Shopping Investment Ltd. to Caa1 from B3.

At the same time, Moody's America Latina downgraded the global scale, foreign currency corporate family rating of General Shopping Brasil SA to B2 from B1 (national scale, local currency corporate family rating to Ba1.br from Baa2.br).

The outlook was revised to negative from stable.

Moody’s said the downgrade reflects General Shopping's strained liquidity position in light of its recently announced capital structure management strategy, which includes, but is not limited to: (a) A deferral of interest payments on the 12% subordinated dollar-denominated perpetual bonds; (b) a tender offer for a portion of its 10% senior unsecured dollar-denominated perpetual bonds to investors outside of Brazil; (c) a common equity issuance to investors in Brazil; and (d) potential asset sales in the future.

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