S&P gives WD FF, notes B, loan BB

S&P said it gave B ratings to WD FF Ltd., the ultimate parent of Iceland Foods Group, integrating Iceland and Food Warehouse supermarkets as well as the acquired Individual Restaurants Business.

The agency also affirmed the B issue rating on the group's senior secured notes due in March 2025 and May 2028, and the BB issue rating on the super senior secured revolving credit facility. It withdrew the ratings on Lannis Ltd., the previous parent. “Lannis Ltd. consolidates the grocery retail business, which represents the majority of the group's activities, and it is the main driver of the group's performance,” the agency said in a press release.

The outlook is negative. “The negative outlook indicates the possibility of a downgrade over the next 12-18 months if Iceland Foods Group's earnings before interest, tax, debt, amortization, and rent (EBITDAR) to cash interest plus rents cover ratio were to remain at about 1.2x for a prolonged period, its free operating cash flow (FOCF) after leases turned persistently negative, or its liquidity weakened,” S&P said.

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