S&P rates Stonegate notes B+

Standard & Poor's said it assigned a B+ long-term corporate credit rating to Stonegate Pub Co. Ltd.

The agency also said it assigned a B+ long-term issue rating to the £260 million and £140 million senior secured notes due 2019. The recovery rating on the notes is 3, indicating 50% to 70% expected default recovery.

The outlook is stable.

The ratings reflect Stonegate's fair business risk profile and highly leveraged financial risk profile, S&P said.

The starting point in assigning the issuer credit rating is B, which is derived by combining its business risk and financial risk assessments, the agency said.

But the long-term rating on Stonegate is B+, owing to a one-notch upward adjustment for the positive comparable rating analysis modifier, S&P added.

This reflects Stonegate's fair business risk profile due to its significant asset backing, healthy free cash flow generation and leverage ratios that are moderately better than those of many other companies in the highly leveraged financial risk category, the agency said.

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