Moody’s changes Stonegate

Moody’s Investors Service said it affirmed the B2 corporate family rating and B2-PD probability of default rating of Stonegate PCL and the B2 ratings of the senior secured notes of Stonegate Pub Co. Financing plc.

Moody's has changed the outlook on both entities to developing from stable.

“The acquisition of Ei Group will materially increase Stonegate's scale and provide revenue and earnings diversification by combining the largely tenanted pub estate of EiG with the company's established and successful managed estate,” David Beadle, Moody's senior credit officer and lead analyst for Stonegate, said in a news release.

“Our decision to change the company's outlook to developing reflects the fact that at this stage the ultimate financing structure of the enlarged business is uncertain, and so in due course either positive or negative rating pressure could emerge.

“Moreover, the ratings affirmation reflects our central scenario that although we believe that leverage might increase somewhat this will be offset by the strengthening of the company's business profile.”

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