Moody’s gives IM Group, notes B2

Moody’s Investors Service said it assigned a first-time B2 corporate family rating and B1-PD probability of default rating to IM Group SAS (Isabel Marant), the ultimate holding company owner of French luxury apparel retailer Isabel Marant. Moody’s also assigned a B2 rating, with a loss given default assessment of LGD5, to the proposed €200 million senior secured notes due 2025, to be issued by IM Group SAS. The outlook is stable.

The proceeds will be used to repay bank debt partly repay shareholders as part of the group’s reorganization, which comprises the merger of certain holding companies of the group and pay related transaction costs.

“Isabel Marant’s B2 rating reflects the company’s good brand recognition in the luxury fashion segment, its diversified distribution channels and geographic presence, its solid and growing profitability, and our expectations of positive free cash flow,” said Guillaume Leglise, a Moody’s assistant vice president and lead analyst for Isabel Marant, in a press release. “The rating also incorporates Isabel Marant’s small scale, its high exposure to fashion risk, limited brand portfolio primarily focused on womenswear and its high initial leverage.”

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