Moody's downgrades Hornback

Moody's Investors Service said it downgraded the long-term corporate family rating of Hornbach Baumarkt AG to Ba2 from Ba1.

Moody's also said it downgraded the company's probability of default rating to Ba2-PD from Ba1-PD, along with the rating on the €250 million worth of senior unsecured notes due in 2020 to Ba2 from Ba1.

The outlook is stable.

The downgrades reflect Hornbach's weaker-than-expected profitability and the resulting deterioration in credit metrics to levels inconsistent with the Ba1 rating, Moody's said.

The stable outlook factors in an expectation that the company will be able to gradually improve its profitability from the current low level while maintaining adequate liquidity, the agency said.

The ratings also consider the company's strong position in its domestic market and good geographical diversification across Europe, Moody's said.

The ratings are constrained by the company's weakened profitability due to intense competition in the do-it-yourself industry in Germany, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.