Moody’s rates Matalan notes B2, Caa2

Moody's Investors Service said it affirmed the B3 corporate family rating and B3-PD probability of default rating of Missouri TopCo Ltd. (Matalan). The actions follow the company's announcement of plans to refinance.

Concurrently, the agency assigned a B2 rating to the proposed £330 million first-lien senior secured notes due 2023 and a Caa2 rating to the proposed £150 million second-lien senior secured notes due 2024, which in each case will be issued by Matalan Finance plc.

Moody's will withdraw the ratings of Matalan Finance plc's existing first- and second-lien notes upon completion of the refinancing.

The outlook is stable.

Moody’s said the B3 corporate family rating reflects: (a) Matalan’s position as one of the leading value clothing retailers in the U.K., with a diversified product range and sizeable active customer base; (b) improvements in execution over the last 18 months, which has supported a recovery in profitability; (c) moderately positive free cash flows; and (d) ongoing commercial and strategic initiatives designed to support ongoing improvements in sales growth and profitability.

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