Fitch lowers Thomas Cook

Fitch Ratings said it downgraded Thomas Cook Group plc's long-term issuer default rating to B from B+.

The outlook is negative.

Fitch also said it downgraded the senior unsecured rating to B+ with recovery rating of RR3 from BB- with recovery rating of RR3 for the bonds issued by Thomas Cook and Thomas Cook Group Finance plc.

The downgrades reflect prolonged operating weakness at Thomas Cook because price pressure is expected to continue, prompted by the knock-on effect of an exceptionally warm summer of 2018 on bookings for the current year, the agency said.

This will delay de-leveraging, Fitch said.

The negative outlook also considers the deterioration in Thomas Cook's liquidity profile with liquidity headroom likely to be limited by the critical, seasonally low cash point in winter 2019 and early 2020, the agency said.

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