S&P: Hema view to negative

Standard & Poor’s said it revised the outlook on Hema BV to negative from stable.

The agency also said it affirmed the company’s B long-term corporate credit rating, along with the BB ratings on its €80 million super senior revolving credit facility due 2018. The super revolver’s recovery rating is unchanged at 1+.

S&P also said it affirmed the B ratings on the €250 million senior secured floating-rate notes and €315 million senior secured fixed-rate notes, both due in 2019.

The recovery ratings on these notes remain at 3, indicating 50% to 70% expected default recovery.

The agency said it affirmed the rating on the €150 million senior unsecured notes due 2019 at CCC+ with a recovery rating at 6. The notes were issued by special-purpose vehicles HEMA Bondco I BV and HEMA Bondco II BV, both owned by Dutch Lion BV, Hema’s parent company.

The proceeds of the notes were on-lent to Hema, S&P said.

The outlook revision follows lower profit margins in the first six months of the year, stemming from higher markdowns aimed at reducing excess inventory accompanied by negative foreign exchange results and an unfavorable sales mix, the agency said.

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