S&P lifts recovery on Thomas Cook unsecureds

Standard & Poor’s said it revised the recovery rating to 3 from 4 on Thomas Cook’s £300 million unsecured notes due 2017, €525 million unsecured notes due 2020 and €400 million unsecured notes due 2021.

The agency also said it affirmed the ratings on the unsecured notes at B, in line with the long-term corporate credit rating on Thomas Cook Group plc.

The upward revision of the recovery rating reflects higher recovery expectations at default, resulting from lower unsecured debt claims at default as S&P said it excludes the bonding and guarantee facilities.

The rationale for excluding these guarantee facilities is based on a valuation of the company on a going-concern basis, S&P said.

In a hypothetical default scenario, the agency said it assumes a decrease in discretionary consumer spending, resulting from weaker economic conditions or an unexpected adverse event.

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