Moody’s downgrades Steinhoff

Moody's Investors Service said it downgraded the ratings of Steinhoff International Holdings NV and Steinhoff Investment Holdings Ltd. by assigning Caa1 corporate family ratings to the two companies and B3.za national scale corporate family rating to Steinhoff Investment.

At the same time, the agency downgraded the backed senior unsecured notes rating of Steinhoff Europe AG to Caa1 from B1.

Moody's also assigned Caa1-PD probability of default ratings to Steinhoff and Steinhoff Investment.

Concurrently, and in line with its practice for corporates with non-investment-grade-ratings, the agency withdrew the B1 issuer rating assigned to Steinhoff and B1/Baa3.za issuer ratings assigned to Steinhoff Investment.

All the ratings remain under review for further downgrade.

Moody’s said the corporate family rating and review for further downgrade reflect the increasing pressure on the company's liquidity profile.

“The situation has been compounded by its operating companies placing an additional liquidity burden on Steinhoff's centralized treasury function to fund their working capital needs,” the agency said in a news release.

“Moody's notes that the operating companies have experienced a reduction or cancelation of credit insurance lines in recent weeks, with credit facilities increasingly being suspended or withdrawn.”

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