S&P shifts Formula One view to stable

S&P said it revised the outlook for Alpha Topco Ltd. (Formula One or F1) to stable from negative and affirmed the B+ ratings on the company and its $2.9 billion term loan and $500 million revolver, with recovery expectations of 3 (60%).

“F1 outperformed our FY2020 base-case forecast. Our base case had included 15 races and minimal race promoter fees. This produced our forecast of around neutral EBITDA and up to minus $300 million in free cash flows for the year. F1 bettered our base case, staging 17 races by extending the season and rescheduling some races to new circuits,” S&P said in a press release.

The agency said it sees F1's leverage returning to under 7x in 2021 and the group will generate material free operating cash flows such that FOCF to debt approaches 10% in the medium term.

The outlook is stable.

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