3 IN. DI LETTURA
(The following statement was released by the rating agency)
Approximately EUR 185 million of rated debt affected
Nov 17 - Moody's Investors Service has today downgraded IT Holding SpA ITH.MI Corporate Family Rating and Probability of Default Rating to Caa1 from B3, and the Senior Secured rating on the EUR 185 million notes due 2012 issued by IT Holding Finance SpA to Caa2 (LGD4, 69%) from B3. The ratings are on review for further possible downgrade.
"Today's rating action reflects ongoing pressure on consumer spending, due to the generally weak economic environment and high uncertainty on consumer confidence, and the negative impact on IT Holding operating performances so far during the year, and the expectation that the company's key credit metrics might remain in line with a Caa rating at best for the next twelve months", says Paolo Leschiutta, Vice President at Moody's and lead analyst for IT Holding.
"Moody's also notes the deteriorating liquidity profile of the company as it continues to rely on receiving bank support at time when the current conditions in the financial markets remain unsettle and further extension of ongoing support might be more challenging for the company".
"Given the ongoing economic slowdown and the uncertainty related to the company's liquidity profile in connection with the current distress in the global capital markets, ratings have been placed under review for further possible downgrade", explains Mr. Leschiutta. The review will focus on (i) the company's capability to secure proper financing needed to invest in the day to day activity and to face pending debt maturities (including the EUR 9.4 million debt repayment delayed till the 22 December 2008), (ii) the company's line of actions to restore the operating performances at core businesses, (iii) the likelihood of further deterioration in consumer spending in general and in the luxury apparel segment in particular, and (iv) the expected credit profile of IT Holding going forward to monitor whether this will remain supportive of the business risk profile of the company.
The last rating action on IT Holding was on the 16 September 2008 when Moody's changed the outlook on all ratings to negative.
Ratings affected by today's action are as follow: - Corporate Family Rating and Probability of Default Rating downgraded to Caa1 from B3; - Senior secured rating on the EUR 185 million notes due 2012 downgraded to Caa2 (LGD4, 69%) from B3; Based in Italy, IT Holding S.p.A. is an European leading operator in the branded apparel and accessories market mainly focused on the young lines segment. During the first nine months ended September 2008, IT Holding reported EUR468 million of consolidated net revenues and EUR38.2 million of EBITDA (adjusted for investments in collection development during the period). (New York Ratings Team)