Moody’s raises New Look Retail to B2

Moody's Investors Service said it upgraded New Look Retail Group Ltd.’s corporate family rating to B2 from B3 and probability of default rating to B2-PD from B3-PD.

Concurrently, the agency assigned a definitive B1 rating to New Look Secured Issuer plc's fixed- and floating-rate senior secured notes due 2022 totaling about £1 billion equivalent, and a definitive Caa1 rating to its £200 million senior notes due 2023; in each of these cases these ratings are one notch higher than the provisional ratings assigned prior to closing of the transaction.

The outlook is stable.

Ratings of the bonds previously issued by New Look Bondco I plc were withdrawn following prepayment.

Moody’s said the upgraded corporate family rating reflects: (a) New Look's exposure to fashion risk, even though it only has a moderate presence in the high fashion segment and uses its flexible supply chain to replicate fashion trends more quickly; as well as (b) the competitive environment in the company's core European markets, which pressure like-for-like sales growth in a number of countries.

The rating is also constrained by the company's leverage, which on a Moody's-adjusted basis is about 5.4 times.

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