S&P cuts House of Fraser, notes

S&P said it lowered its long-term corporate credit rating on House of Fraser (UK & Ireland) Ltd. to B- from B.

The outlook is negative.

At the same time, the agency lowered the long-term issue rating on House of Fraser's £175 million senior secured floating-rate notes to B- from B, in line with the corporate credit rating. The 3 recovery rating is unchanged, reflecting an expectation of meaningful recovery prospects (50%-70%; rounded estimate: 50%) in the event of default.

“Further like-for-like sales and EBITDA margin declines underlined House of Fraser's underperformance in its recent second quarter results (ending July 29), resulting in a continued trend of materially negative free operating cash flows over the last 12 months,” S&P said in a news release.

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