Moody's downgrades Thomas Cook

Moody's Investors Service said it downgraded the corporate family rating of Thomas Cook Group plc to B2 from B1 and probability of default rating to B2-PD from B1-PD.

Moody's also said it downgraded the ratings on Thomas Cook's senior unsecured notes to B2 from B1.

The outlook was revised to negative from stable.

The ratings reflect the deterioration of credit metrics after unfavorable earnings development in the fiscal 2018 and the group's weakened liquidity, Moody's said.

The negative outlook reflects concerns regarding the company's ability to recover its profitability and cash generation in the coming fiscal year as the macroeconomic tailwind becomes less supportive, the agency said.

Thomas Cook's earnings in the fiscal 2018 dropped sharply as the company suffered from a prolonged period of unusually hot weather this summer that was evidenced across all of its source markets in Europe, Moody's said.

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