Fitch affirms A&O

Fitch Ratings said it affirmed Alpha Group's (A&O) long-term issuer default rating at B with stable outlook and the senior secured debt rating at BB-/RR2/89%.

A&O's rating and stable outlook encapsulate a deleveraging path based on our expectation of improving free cash flow generation by 2021, the agency said.

The rating is constrained by the limited scale of the operations, aggressive LBO-style leverage, increased execution risks as A&O is expanding outside Germany, and higher capex required to renovate its existing properties and extend its brand to the ultra-low-cost hotel market, Fitch said.

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