Scope Ratings assigns a BB-/stable grade to the Casino group

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The European credit rating firm Scope Ratings GmbH has recently conducted a new analysis of the French retailer’s debt structure, in order to assess and update its risk profile.

The retail group headed by Jean-Charles Naouri obtained rather positive ratings, considering the retail’s market overall performances in 2021. Such an improvement appears likely to enhance the market’s perception of the French group.

Meaning and stakes of Scope Rating’s evaluation of the Casino group

Casino Guichard-Perrachon SA and its subsidiary Quatrim SAS hence received a BB-/Stable issuer rating, and its senior secured debt has been rated BB. The aforementioned BB- grade has sparked some attention in the financial world. It is indeed (respectively) two and three grades ahead of the ratings issued by the American firms Standards & Poor’s and Moody’s regarding the Casino group. The rating scale used by specialized firms such as Scope Ratings, Moody’s, or S&P indeed ranks from AAA (best possible grade) to C or D (which means default).

An issuer rating aims at evaluating the reliability of a company issuing bonds (which is the case of most major firms). The objective is to assess the risk level, namely the possibility of default (debts left unpaid) of the analysed entity. The term “senior debt” refers to the debts that must be repaid first if a given company goes out of business.

Scope Ratings also issued a B+ grade to the Casino group’s unsecured senior debt, and a B- grade to its perpetual subordinated debt (hybrid). The latter term refers to debt that continues indefinitely and has no maturity date. Moreover, the French retailer’s short term debt (financial obligations expected to be paid off within a year) was rated S-3.

An encouraging sign for the Casino group 

The grades issued by Scope Ratings regarding the group headed by Jean-Charles Naouri appear rather favorable and encouraging considering the French retailer’s history in the matter. The european credit rating company, which has a precise vision of the retail market’s specificities and stakes in europe, indeed stated that “the Casino group’s risk profile is supported by a consistent geographic diversification”. Scope Ratings hence described the French group’s risk profile as “qualitative” and praised its “low financial risk”. The latter can be explained by a high aggregate corporate leverage and a low free cash-flow generation.

Beyond the Casino group, Scope rates several players of the retail market, such as Fnac-Darty, Metro or Ceconomy, as well as companies active in very different business branches, such as Sanofi.