S&P cuts Qurate Retail

S&P said it lowered Qurate Retail Inc.’s issuer rating to B- from B+, assigned a B- rating to Liberty Interactive LLC, the obligor on some of the corporate-level unsecured debt, to enhance transparency, and downgraded QVC Inc.'s secured debt to B+ from BB. The recovery ratings remain 1.

“The downgrade reflects our view that Qurate Retail Inc.'s business prospects have weakened amid the ongoing deterioration in its operating performance. Customer count declined in the third quarter year over year as the company continued to face significant supply chain disruptions which caused canceled orders. In particular, it experienced a significant pullback in orders by repeat customers compared to 2021, who represent about 90% of total purchases,” S&P said in a press release.

The agency said it forecasts Qurate's adjusted leverage to remain in the high-5x area in 2022, improving to about 5x in 2023 but still up more than a turn from 2021.

The outlook remains negative.

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