S&P lowers THG

S&P said it lowered THG plc’s ratings to B- from B. The addition of the new £156 million banking facility in the capital structure weakened the recovery expectation for the €600 million term loan B facility at the point of hypothetical default. While the recovery rating on the senior secured debt remains unchanged at 3 and changed the recovery estimate to 50% from 65%.

“THG's slowing revenue growth rate means the previously anticipated deleveraging is highly unlikely. The company reported overall revenue growth of 3% in 2022 compared to management's original guidance of 20%-25%. Its beauty and nutrition segments in its primary markets of the U.K., and the U.S. among others (over 50% of 2022 revenue) performed better at about 9.4%, but still fell short of the original guidance,” the agency said in a press release.

S&P said it forecasts THG's credit metrics will remain weaker for longer than it had previously expected, with S&P Global Ratings-adjusted leverage above 7.5x (including leases).

The outlook remains stable.

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