Fitch lowers Alpha Group

Fitch Ratings said it downgraded Alpha Group Sarl's long-term issuer default rating to B- from B. The outlook remains negative. Fitch also downgraded its senior secured debt rating to B+/RR2 from BB-/RR2. Alpha owns A&O, a youth travel hotel and hostel operator.

“The downgrade reflects A&O's impaired financial flexibility as we expect the company will use most of its available liquidity headroom to close a funding gap and cover operating losses following a collapse in group travel related to the Covid-19 pandemic. Once the current crisis abates, A&O has the potential to capitalize on supportive market trends and grow into a Europe-wide brand,” said Fitch in a press release.

The negative outlook reflects the credit downside risks arising from A&O's fragile liquidity and weak free cash flows, constrained financial flexibility and persistently elevated leverage, which could make the group's capital structure increasingly unsustainable beyond 2020, if the rebound from the Covid-19 crisis is weaker than expected.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.