Netherlands-based general merchandise and food retailer Hema has announced plans to refinance its existing capital structure by issuing €275 million senior secured floating rate notes, €290 million senior secured notes, and €150 million senior unsecured notes. We view Hema's business risk profile as fair and its financial risk profile as highly leveraged. We are assigning our 'B+' preliminary long-term corporate credit rating to Hema, and rating its debt. The stable outlook reflects our view that Hema's profitability will likely improve following the implementation of its cost-saving strategy and that Hema should be able to continue generating positive free operating cash flow and maintain credit metrics commensurate with the rating. On June 5, 2014, Standard&Poor's Ratings Services assigned its
