Fitch trims Morrisons

Fitch Ratings said it downgraded Market Holdco 3 Ltd.'s (Morrisons) long-term issuer default rating to B+ from BB-.

“The downgrade reflects higher-than-previously expected leverage, and lower coverage metrics due to weaker profitability and free cash flow (FCF) generation, and higher interest costs on floating-rate debt. Based on our revised forecasts, we expect leverage will trend towards B category medians only by 2025,” the agency said in a press release.

Fitch said it now expects Morrisons' EBITDAR leverage to trend towards 5.7x by FY25, from around 7.5x in FY22 compared with its previous forecast of 4.8x by January 2025, which was just below the downgrade sensitivity threshold.

The outlook is stable.

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