Moody's drops Enterprise Inns

Moody's Investors Service said it has downgraded the corporate family rating of Enterprise Inns plc to Ba3 from Ba2 and the probability of default rating to B1 from Ba3.

At the same time, Moody's said it downgraded the rating of £275 million senior secured floating-rate notes due 2031 to Ba1 from Baa3.

The outlook is stable.

The rating downgrades reflect Moody's belief that the prolonged malaise in the pub industry is not likely to end soon given the poor economic outlook in the United Kingdom and diminished consumer confidence and that as a result, Enterprise Inns' credit metrics are likely to weaken further over the intermediate term beyond the ratio targets the agency said it had previously indicated for a Ba2 CFR, in particular the consolidated leverage trending above 7.5x, and on an unconsolidated basis leverage of 6.0x and 2.5x interest cover.

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