S&P cuts Missouri TopCo view

Standard & Poor's said it revised its outlook on Missouri TopCo Ltd., the parent company of Matalan, to negative from stable. At the same time, the agency said it affirmed the B long-term corporate credit rating on Missouri TopCo.

In addition, the agency affirmed its BB- issue rating on the £250 million senior secured notes issued by Matalan Finance Ltd. and its CCC+ issue rating on Matalan Finance's £225 million senior unsecured notes.

S&P said the outlook revision reflects further deterioration in Matalan's operating performance and credit metrics in the context of a challenging macroeconomic environment for U.K. retailers. Matalan's earnings have been impaired by pressure on gross margins from strong competition, discounting of stock to maintain sales, and the impact that higher cotton prices in 2010 and 2011 have had on Matalan's input costs, the agency said.

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