S&P rates El Corte notes BB+

S&P said it assigned its BB long-term issuer credit rating to El Corte Ingles, SA.

The outlook is stable.

At the same time, the agency assigned its BB+ rating to the proposed €600 million senior unsecured notes.

The recovery rating of 2 reflects an expectation of substantial recovery (70%-90%; rounded estimate: 85%) in the event of a default.

“Our rating reflects ECI's large and diverse operations, complementary businesses, superior brand awareness both nationally and internationally, and an unparalleled network of large stores in affluent parts of major Spanish cities and tourist destinations, underlined by strong after-sale services and financing to customers,” S&P said in a news release.

“Moreover, ECI benefits from substantial operational and financial flexibility, thanks to its ownership of a large real estate portfolio.

“However, ECI's retail segment is sensitive to changing consumer preferences, rising competition from pure online players, and large specialized food and non-food retailers.”

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