Research Update: Edcon Holdings Outlook Revised To Neg On Breach Of S&P's Ratio Guideline; Ratings Affirmed Jun 08

Standard & Poors, June 2008

Abstract
On June 11, 2008, Standard & Poor's Ratings Services revised its outlook to negative from stable on South Africa-based nonfood retailing group Edcon Holdings (Proprietary) Ltd. (Edcon). At the same time, Standard & Poor's affirmed all its ratings on Edcon, including its 'B+' long-term corporate credit rating, the 'B-' issue rating on the ?630 million senior unsecured floating-rate notes due 2015, and the 'BB-' rating on the ?1.18 billion senior secured floating-rate notes due 2014 issued by guaranteed related entity Edcon (Proprietary) Ltd. The outlook revision follows the company's operating underperformance, which resulted in Edcon's adjusted EBITDA interest coverage ratio (including interest accrued on the shareholder loan) of 1.0x in fiscal 2008, well below our guideline of 1.5x. Although the...

Companies mentioned in this report are:
- Edcon Holdings (Proprietary) Ltd.
- Edcon (Proprietary) Ltd.

Action: Affirmed
Action: Outlook: Negative

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Product Type: Research Update
Research updates complement media releases. They offer more depth and detail than summary analyses by incorporating all information published in the media release. They are more up to date than summaries in that they are published simultaneously with media releases.

- Edcon Holdings (Proprietary) Ltd.
- Edcon (Proprietary) Ltd.

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