Moody's downgrade Casino

All,CAs per conversations we’ve held with most of you, the risk of a Casino downgrade had been present for a while. Moody’s have just come out with a downgrade from Ba1 to Ba3 with negative outlook. Snd increased probability of default of Ba3-PD. We have never quite understood ratings, but if its two notches and downwards then Moody’s are on the right track.

What we are less clear about is how Casino’s French FCF fell short of their expectations. According to Tomas’ model the results were right on target. The company must liquidate at least another E1bn of assets in the not too distant future to finance its ongoing negative cashflow over the next two years, reduce leverage and - importantly - pay dividends to support Rallye.

Moody’s correctly identify the risk of potential repercussions Rallye's own battle for solvency might have on Casino.

Wolfgang