17th Apr 2019 12:56
LONDON (Alliance News) - Moody's Investors Service on Wednesday upgraded the B2 corporate family rating of Ei Group PLC to B1, while the outlook remained stable.
The ratings agency also affirmed the B1 rating of the pub company's GBP275 million senior secured bond due in 2031.
"Ei Group's upgrade of the corporate family rating to B1 reflects the improvement in leverage and liquidity following the sale of the company's GBP348 million commercial property portfolio," said Ramzi Kattan, a Moody's vice president & senior analyst, and lead analyst for Ei Group.
The ratings agency said Ei Group's B1 corporate family rating is supported by its leading position as one of the largest pub operators in the UK - with an estate of more than 4,000 pubs - and an experienced management team.
Counterbalancing these strengths are a challenging UK pub sector operating environment and leverage that is above the company's medium term target, Moody's noted.
Meanwhile, the stable outlook reflects Moody's view that Ei Group will maintain its track record of strong operating performance and continue to make progress in reshaping its portfolio by 2020.
The outlook also reflects the ratings agency's expectation that the company will continue to generate stable cash flow and maintain adequate liquidity, and that there is no sharp deterioration in the operating environment for UK pubs.
Looking ahead, Moody's said Ei Group's ratings can be further upgraded if the company will report higher revenue and operating profit, resulting into improved financial metrics.
However, the rating can be downgraded as a result of a weakening of the company's liquidity profile.
Ei Group shares were trading 1.0% lower on Wednesday at 211.20 pence each.
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