Moody’s lifts Hornbach Baumark

Moody’s Investors Service said it upgraded Hornbach-Baumark AG’s corporate family rating to Ba1 from Ba2.

Moody’s also said it upgraded the company’s probability of default rating to Ba1-PD from Ba2-PD and the senior unsecured rating on its €250 million notes due in 2020 to Ba1 from Ba2.

The outlook is stable.

The upgrades conclude a review for upgrade that began in June following the publication of the agency’s updated methodology, Moody’s said.

The upgrades reflect a combination of an improvement in the company’s credit metrics following the change in methodology for capitalizing operating leases, as well as the improvement in the macroeconomic environment across Europe, the agency said.

The ratings reflect the company’s strong position in its domestic market and its growing international presence, along with its good track record in executing its strategy, Moody’s said.

The ratings also consider the company’s relatively small size compared with other European retailers, highly competitive nature of the DIY market and high level of capital expenditure associated with new store openings, the agency said.

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