S&P cuts Marks & Spencer

S&P said it downgraded Marks & Spencer and its senior unsecured debt to BB+ from BBB- and put all ratings on CreditWatch with negative implications. The agency also assigned a 3 recovery rating to its senior unsecured debt, indicating expectations of a meaningful (50%-70%; rounded estimate: 65%) recovery to creditors in the event of a payment default.

“The downgrade reflects our view that M&S' earnings and cash generation will decline sharply at least over the remaining part of this calendar year. We believe the outbreak of coronavirus will cause a substantial decline in non-food sales in the U.K. and also internationally,” said S&P in a press release.

In resolving the CreditWatch, S&P said it will evaluate new information regarding the spread of Covid-19 and the effect it is having on M&S' earnings, liquidity and cash flows.

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