COVID-19: S&P Global lowers ratings on Future Retail to CCC-

S&P Global Ratings on Thursday loweredratings on Future Retail to CCC-, vulnerable to non-payment grade, stating that the company's liquidity position has weakened, exacerbated by the extended lockdown in India due to COVID-19.

The ratings agency said the Kishore Biryani-led retail major's ability to meet its upcoming financial obligations is dependent on an improvement in business conditions or access to additional lines of credit.

S&P said it is lowering its preliminary long-term issuer credit rating on Future Retail and the preliminary long-term issue rating on the company's USD 500 million senior secured notes to 'CCC-' from 'B-'.

"The ratings remain on CreditWatch with negative implications," S&P Global Ratings said in a statement.

It further said, "Future Retail's operating cash flows are likely to remain weak over the next two months."
Explaining why it downgraded the company to the CCC- grade which implies that its ability to meet credit obligations is dependent upon favorable business, financial, and economic conditions, S&P said, "We anticipate a phased relaxation of the lockdown across India after the government's deadline of May 3."