Fitch downgrades Rank

Fitch Ratings said it downgraded Rank Group plc's issuer default and senior unsecured ratings to B+ from BB- following the sale of its Hard Rock branded restaurants, hotels and casinos for a net consideration of £460 million to the Seminole Tribe of Florida. The transaction is subject to Rank shareholders' approval.

The RR4 recovery rating on the bonds and the B short-term rating were affirmed, and the outlook remains negative.

"Although the Hard Rock brand needed rejuvenation, it performed comparatively better than Rank's continuing gaming businesses. The disposal will deprive Rank of a source of diversification from the U.K. gaming business, likely to become more competitive and in which Rank's position remains exposed," Frederic Gits, senior director in Fitch's RLCP team, said in an agency rating.

The combined impact of this transaction, of the £172 million sale and leaseback that took place in July and of the completion of the share buyback program announced after the disposal of the Deluxe Film business is expected to result in Rank's lease adjusted leverage remaining at about 5x, slightly above 2005's level, the agency said.

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