info

Yes No
Moodys.com
Terms of Use
REGULATORY
.
SUSTAINABILITY
.
DIVERSITY, EQUITY & INCLUSION
CAREERS
.
ABOUT US
.
CONTACT US
HOME
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Can't read?
Try a new set
Send Cancel
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
OK
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
OK
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

 

By clicking “I AGREE”, you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s information that becomes accessible to you (the “Information”). References herein to “Moody’s” include Moody’s Corporation. and each of its subsidiaries and affiliates..

 

Terms of One-Time Website Use

 

1.             Unless you have entered into an express written contract with www.moodys.com to the contrary and/or agreed to the Terms of Use at www.moodys.com or ratings.moodys.com, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.                   

 

2.             CREDIT RATINGS AND MOODY’S MATERIALS FOUND ON WWW.MOODYS.COM OR SITES OTHER THAN RATINGS.MOODYS.COM MAY NOT BE DISPLAYED IN REAL TIME. FOR REAL-TIME DISPLAYS OF CREDIT RATINGS AND OTHER INFORMATION REQUIRED TO BE DISCLOSED BY MIS PURSUANT TO APPLICABLE LAW OR REGULATION, PLEASE USE RATINGS.MOODYS.COM.           

 

3.             You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities. Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision. No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.

 

4.             To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.     

 

5.             You agree to read and be bound by the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.​​​

 

6.             You agree that any disputes relating to this agreement or your use of the Information, whether in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

​
I AGREE
Rating Action:

Moody's downgrades Casino's CFR to B2; CFR on review for further downgrade in relation with refinancing risk

23 Oct 2019

Moody's also downgrades unsecured debt ratings to B3; assigns B1 secured debt ratings

Paris, October 23, 2019 -- Moody's Investors Service ("Moody's") has today downgraded French grocer Casino Guichard-Perrachon SA's (Casino) long-term corporate family rating (CFR) to B2 from B1 and its probability of default rating (PDR) to B2-PD from B1-PD. Moody's has also downgraded Casino's senior unsecured rating to B3 from B1, its senior unsecured MTN program rating to (P)B3 from (P)B1, and the deeply subordinated perpetual bonds' rating to Caa1 from B3. In addition, Moody's has affirmed the Not Prime commercial paper rating and the (P)NP short term program rating.

Concurrently, Moody's has assigned a B1 rating to the EUR750 million senior secured term loan B to be issued by Casino and a B1 rating to the EUR750 million senior secured instrument to be issued by Casino's subsidiary Quatrim S.A.S.

The CFR and PDR were simultaneously put under review for further downgrade reflecting the execution risk of the new transaction. Instrument ratings have not been placed on review for downgrade. Casino's outlook has been changed to ratings under review from negative.

"We have downgraded Casino's corporate family rating because we expect its gross adjusted leverage to continue to exceed 6x over the next 18 months. This is a level more commensurate with a B2 rating when also considering Casino is not generating positive free cash flow, despite the company's scale and market positions," says Vincent Gusdorf, a Moody's Vice President -- Senior Credit Officer and lead analyst for Casino. "The review for downgrade reflects Moody's view that Casino's liquidity could deteriorate in the near term if the planned refinancing does not proceed as expected," Mr. Gusdorf added.

RATINGS RATIONALE

Casino plans to issue a EUR750 million senior secured term loan B and a EUR750 million senior secured instrument maturing in 2024. It intends to use the proceeds to repay existing debt. Casino also proposes to negotiate a new senior secured revolving credit facility of about EUR2,000 million maturing in 2023 to replace its previous facilities expiring between 2019 and 2022.

Assuming the repayment of overdrafts and commercial paper, Moody's estimates that Casino France's debt will only fall to about EUR7,200 million on 31 December 2019 (including subordinated bonds and excluding fair value hedges), compared to about EUR7,300 million on 31 December 2018, while the rating agency previously expected a decline. As a result, the rating agency now forecasts that Casino's Moody's-adjusted gross debt/EBITDA ratio will remain at about 6.5x over the next 12 months, while Moody's previously expected leverage to decline towards 6.2x in 2019 and 5.5x in 2020. Assuming a proportional consolidation of Latin American subsidiaries, Moody's estimates that leverage is even be higher, at around 7.5x-8x in 2019.

The level of absolute debt and gross adjusted leverage is considered high given that the operating environment will continue to pressure margins over the next 12-18 months. Moody's forecasts that free cash flow will stay negative even though the company has prudently cut dividends and is reducing capex. Despite the proposed refinancing of Casino's debt, interest payments remain high and will continue to weigh on Casino's operating cash flow.

On the positive side, the documentation of secured debt instruments will contain provisions limiting payments to shareholders, as well as covenants compelling Casino to allocate part of its asset disposal proceeds to debt repayment. This will offset part of the risk that Rallye would extract value from Casino. Moody's highlights that any disposal, which would create new minorities within the group, while positive for liquidity, could have a limited effect on the deleveraging trajectory when assessed on a proportional consolidated basis.

Moody's continues to positively view Casino's good market positions, although its market share in France will decline because of asset sales, and the company's good track record to date in executing disposals, which will be key to the company's ability to reduce debt in the future.

Moody's considers that Casino's liquidity will appear increasingly fragile in 2020 if the refinancing does not go ahead. While Casino France had access to EUR2,719 million of committed undrawn credit facilities as of 30 June 2019, a EUR1,200 million credit facility will mature in February 2021. The planned refinancing aims at extending the credit facility maturity to 2023 and to repay part of upcoming debt maturities.

The rating review process will focus on Casino's ability to successfully implement its refinancing plan because Casino's liquidity would deteriorate if the refinancing does not go ahead and if no alternative solutions are found. While Casino France had access to EUR2,719 million of committed undrawn credit facilities as of 30 June 2019, a EUR1,200 million credit facility will mature in February 2021. The planned refinancing aims at extending the credit facility maturity to 2023 and to repay part of upcoming bond maturities.

ESG CONSIDERATIONS

Although Casino is listed, the group's controlling owner remains Casino's Chief Executive Officer and chairman of Rallye's board. This is despite the ongoing debt restructuring of Casino's controlling holding companies Rallye, Foncière Euris and Finatis. This situation is credit negative because it could distract Casino's management at a time when its full attention is required to address the challenges of the French market.

STRUCTURAL CONSIDERATIONS

Pro forma the proposed refinancing, Casino France would have had EUR7,517 million of debt as at 30 June 2019, including the EUR750 million of senior secured term loan B, the EUR750 million of senior secured instruments, EUR4,059 million of unsecured bonds issued under its EMTN program, EUR167 million of commercial paper and EUR441 million of other debts. The EUR750 million senior secured term loan B as well as the senior secured RCF of about EUR2,000 million have share pledges on key subsidiaries, including Monoprix and Segisor, the holding company owning the shares of Latin American operations. The EUR750 million secured instruments has share pledges on IGC, a subsidiary of Casino owning real estate assets worth EUR1,000 million.

Moody's views the EUR750 million term loan B and the EUR750 million senior secured instruments as having relatively comparable security values and rates them B1, one notch above the CFR. The rating agency considers these instruments as secured but considers the security package as moderate since it is mostly made of share pledges.

The EUR4,059 million unsecured bonds are ranked in second position, and are rated B3, one notch below the CFR. The EUR1,350 million subordinated bonds are the most subordinated class of debt and is rated Caa1, two notches below the CFR.

The probability of default rating is based on a 50% family recovery assumption, which reflects a capital structure including bonds and bank debts with financial covenants.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's would lower Casino's CFR to B3 if it fails to extend its debt maturities. If the proposed transaction succeeds, Moody's would confirm the B2 CFR. In that case, maintaining this rating would require Casino to achieve a Moody's-adjusted debt/EBITDA of less than 6.5x at the group level, trending over time to below 6x on the back of gross debt reduction in France. Negative pressure on the ratings would also materialize if Casino fails to improve Casino France's free cash flows after dividends and before asset disposals.

If the refinancing takes place, Moody's may consider a positive rating action over time if Casino demonstrates an ability to reduce substantially and sustainably the gross debt of its French operations, leading to a Moody's-adjusted debt/EBITDA comfortably below 6x and trending towards 5.5x, generating sustainable free cash-flow after having reversed the cash burn of Casino France and while maintaining solid liquidity.

COMPANY PROFILE

With EUR37 billion of reported revenue in 2018, France-based Casino is one of the largest food retailers in Europe. Its main shareholder is the French holding Rallye, which owned 52.3% of Casino's capital and held 61.7% of its voting rights as of 30 June 2019. Casino's chief executive officer Jean-Charles Naouri controls Rallye through a cascade of holdings. On 23 May 2019, Rallye and its controlling holdings, namely Foncière Euris, Finatis and Euris filed for safeguard procedure under French law.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Retail Industry published in May 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Vincent Gusdorf, CFA
VP - Sr Credit Officer
Corporate Finance Group
Moody's France SAS
96 Boulevard Haussmann
Paris 75008
France
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Jeanine Arnold
Associate Managing Director
Corporate Finance Group
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

Releasing Office:
Moody's France SAS
96 Boulevard Haussmann
Paris 75008
France
JOURNALISTS: 44 20 7772 5456
Client Service: 44 20 7772 5454

No Related Data.
© 2022 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $5,000,000. MCO and Moody’s Investors Service also maintain policies and procedures to address the independence of Moody’s Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY100,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​
Moodys.com