Dutch Retailer Hema Downgraded To 'SD' From 'CC' On Distressed Debt Exchange; New Notes Rated 'B', 'CCC+', And 'CCC-'

On Oct. 19, 2020, Hema B.V. completed its previously announced debt restructuring, which we view as tantamount to a selective default (SD) because it led debtholders to receive less than originally promised. Hema has issued new debt as a result of the transaction, and our analysis on these instruments is based on Hema's prospective creditworthiness and the relative ranking of the debt instruments after completion of the restructuring. We are downgrading Hema B.V to 'SD' from 'CC', and lowering our ratings on its €80 million revolving credit facility (RCF), €600 million senior secured notes, and €150 senior unsecured notes to 'D' (default) from 'CCC', 'CC', and 'C', respectively. At the same time, we are assigning our 'B' issue and '1'

...October 30, 2020 - On Oct. 19, 2020, Hema B.V. completed its previously announced debt restructuring, which we view as tantamount to a selective default (##) because it led debtholders to receive less than originally promised. - Hema has issued new debt as a result of the transaction, and our analysis on these instruments is based on Hema's prospective creditworthiness and the relative ranking of the debt instruments after completion of the restructuring. - We are downgrading Hema B.V to '##' from '##', and lowering our ratings on its 80 million revolving credit facility (RCF), 600 million senior secured notes, and 150 senior unsecured notes to 'D' (default) from '###', '##', and 'C', respectively. - At the same time, we are assigning our 'B' issue and '1' recovery ratings to a new 42 million private placement notes, '###+' issue and '3' recovery ratings to the amended 300 million senior secured notes, and '###-' issue and '6' recovery ratings to the new 120 million payment-in-kind (PIK)...

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