Moody's: New Look notes B1

Moody's Investors Service said it assigned a first-time B3 corporate family rating and B3-PD probability of default rating to New Look Retail Group Ltd., the ultimate holding company of the New Look group.

Moody's also said it assigned a provisional B1 rating with a loss given default assessment of LGD 3, 32%, to the proposed £800 million worth of senior secured notes due 2018 to be issued by New Look Bondco I plc.

The outlook is stable.

The proceeds from the proposed notes will be used to repay all of New Look's outstanding debt, which includes senior and mezzanine facilities; repay a cash amount of existing payment-in-kind loans; and pay fees and expenses associated with the proposed refinancing transactions, Moody's said.

The ratings balance the company's exposure to fashion risk, the persistently weak environment in its core European markets and its high leverage with its good brand recognition in the value-fashion category, the agency said.

The ratings also consider New Look's exposure to fashion risk, even though it only has a moderate presence in the high fashion segment and it uses its flexible supply chain to replicate fashion trends more quickly, Moody's said, as well as the competitive and persistently weak environment in the company's core European markets.

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