Fitch downgrades Pick n Pay Stores to A(zaf)
Ratings agency Fitch Ratings has downgraded Pick n Pay's (PIK's) national long-term rating to A(zaf) from A+(zaf). The national short-term rating has been affirmed at F1(zaf). The outlook is stable.
Fitch said late on Friday that the downgrade reflected that the group's pace of deleveraging would be slower than previously anticipated‚ with net leverage projected to be above 3.5 times over the next two years‚ which is not consistent with the level set by Fitch for an A+(zaf) rating.
It said the stable outlook was supported by Pick n Pay's acceptable business profile relative to its peers - despite the execution risk embedded in its transformation strategy - underpinned by an extensive store network‚ strong retail brand awareness and a focus on defensive consumer staples.