Research Update: Woolworths Group Ltd. 'BBB/A-2' Ratings Affirmed Following AASB-16 Adoption; Outlook Stable

Australia-based retailer Woolworths Group Ltd.'s adoption of AASB 16, effective July 1, 2019, will increase the company's adjusted leverage to above 3.0x from 2.9x if it had been calculated at June 30, 2019. However, this increase does not change our view of the company's underlying creditworthiness. On May 12, 2020, S&P Global Ratings affirmed its 'BBB' long-term and 'A-2' short-term issuer credit ratings on Woolworths. We also affirmed the 'BBB' issue credit ratings on the company's debt. The outlook remains stable, reflecting our expectation that Woolworths will maintain its strong market positions while managing its financial risk profile consistent with the 'BBB' rating, including as part of any potential future demerger of the Endeavour Group division. We have revised our

...- Australia-based retailer Woolworths Group Ltd.'s adoption of AASB 16, effective July 1, 2019, will increase the company's adjusted leverage to above 3.0x from 2.9x if it had been calculated at June 30, 2019. However, this increase does not change our view of the company's underlying creditworthiness. - On May 12, 2020, S&P Global Ratings affirmed its '###' long-term and 'A-2' short-term issuer credit ratings on Woolworths. We also affirmed the '###' issue credit ratings on the company's debt. - The outlook remains stable, reflecting our expectation that Woolworths will maintain its strong market positions while managing its financial risk profile consistent with the '###' rating, including as part of any potential future demerger of the Endeavour Group division. - We have revised our downgrade rating trigger for the company, to a debt to EBITDA of 3.75x from 3.6x....

Research Update