(The following statement was released by the rating agency)
July 06 -
-- U.K.-based tour operator Thomas Cook Group PLC (Thomas Cook) continues to face significant operating challenges, with weak discretionary spending deepening the structural changes hitting the industry, and Thomas Cook in particular.
-- We believe Thomas Cook will face difficulties in stabilizing operating performance and cash flow generation in the next 12-18 months, as lower profitability margins are combined with an increased need of restructuring costs to improve competitiveness in some of its key markets.
-- We are therefore lowering our long-term corporate credit rating on Thomas Cook to 'B-' from 'B'.
-- The negative outlook reflects our view of ongoing pressures on Thomas Cook's operating performance and factors in a possible further downgrade if the group's liquidity position deteriorates further.
On July 6, 2012, Standard & Poor's Ratings Services lowered to 'B-' from 'B' its long-term corporate credit rating on U.K.-based tour operator Thomas Cook Group PLC (Thomas Cook). The outlook is negative.
At the same time, we lowered our issue rating on Thomas Cook's unsecured notes to 'B-' from 'B'. The recovery rating on this debt remains unchanged at '4', indicating our expectation of meaningful (30%-50%) recovery in the event of a payment default.
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