Moody’s gives New Look notes B2, Caa2

Moody's Investors Service said it affirmed and changed to positive from stable the outlook on New Look Retail Group Ltd.’s B3 corporate family rating, probability of default rating and subsidiaries.

Concurrently, the agency assigned a provisional B2 rating to New Look Secured Issuer plc's envisaged fixed- and floating-rate senior secured notes due 2022 totaling about £1 billion equivalent, and a provisional Caa2 rating to the £200 million senior notes due 2023 to be issued by New Look Senior Issuer plc.

Proceeds will be used to effect a full refinancing of existing debt facilities, with the existing senior secured notes due 2018 and the existing PIK facility to be redeemed in full. Cash on the Balance Sheet will part fund related fees and expenses.

"New Look's operational and financial performance has been on a positive trajectory for some time, with growth in like-for-like sales, total revenues and profitability, as well as positive free cash flow. The disposal of the loss making subsidiary MIM in autumn 2014 was a credit positive, as was the £40 million prepayment in respect of the PIK facility in May, while the recently announced change of ownership should provide a platform of stability for management to execute their strategic expansion plans. Furthermore, the proposed transaction will result in lower interest costs and, all in all, we consider the company is currently strongly positioned in its rating category," David Beadle, Moody's vice president, senior analyst and lead analyst for New Look, said in a news release.

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