Dixons Retail's £150m bond, announced recently, has received a less than enthusisatic response from ratings agency Moody's.
The agency announced it had put a B1 rating on the five year bond, the highest tier of the speculative end of the scale. Moody's also put a negative outlook on the bond.
The news has helped push Dixons down 3.9% to 19.22p, and overshadowed an upgrade from Bank of America/Merrill Lynch. Merrill raised its price target for Dixons from 19p to 22p as part of a general note on the retail sector.
Ahead of Home Retail's trading update on Thursday, Merrill lifted its recommendation on the Argos and Homebase business:
We have raised our earnings per share forecasts for Home Retail by 4% and our price objective from 95p to 100p due to an assumption of better cost control for Argos, with [cost] savings to come in the second half.
Home Retail is 3.45p higher at 100.8p.
