Fitch revises Alpha view downward

Fitch Ratings said it revised Alpha Group Sarl’s outlook to negative from stable, while affirming the lodging group’s long-term issuer default rating at B.

Alpha Group is the top entity in a group that owns A&O. “The outlook change to negative reflects Fitch’s estimates of volatile free cash flows (FCF) and elevated leverage in 2019 and 2020. This deviates from the deleveraging path Fitch had expected, with the company now behind schedule in completing its facilities’ re-design, while extending its asset network outside its home market,” Fitch said in a press release.

The rating is limited by A&O’s scale of operations, aggressive LBO-style leverage and high execution risks as the company continues investing heavily in renovating its properties and new locations abroad, the agency said.

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