Moody’s cuts THOM PDR, rates facilities B2

Moody's Investors Service said it affirmed THOM Europe SAS' corporate family rating at B2 following the company's proposed refinancing of its existing bond and the payment of a one-off dividend to its shareholders.

Concurrently, the agency assigned a B2 (LGD 4) rating to the company’s new €670 million worth of senior secured term loan B (due 2024) and a B2 (LGD 4) to the €90 million worth of senior secured revolving credit facility.

At the same time, Moody’s downgraded the B1-PD probability of default rating to B2-PD.

The outlook is stable.

Upon successful closing of the proposed refinancing transaction and full redemption of THOM's exiting notes, the agency will withdraw the B2 rating assigned to the €537 million worth of senior secured notes due July 2019.

Moody's said it expects THOM's Moody's-adjusted leverage ratio will trend toward 5 times over the next 12 to 18 months notably through continued profitability improvement on the back of top line growth in the low to mid-single range (in percentage terms) supported by both store openings and a modest like-for-like growth, gross margin improvement aided by the achievement of cost synergies with Stroili, a large Italian jeweller acquired in late 2016.

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