Fitch revises EG outlook to positive

Fitch Ratings said it revised EG Group Ltd.'s outlook to positive from stable while affirming its long-term issuer default rating at B-. Fitch also placed EG's B/RR3 senior secured instrument ratings on rating watch positive and affirmed its second-lien instrument ratings at CCC/RR6.

“The positive outlook reflects an expected around $4.2 billion reduction in financial debt ahead of EG's approaching refinancing, from proceeds of EG's announced disposal of its U.K. &I business to ASDA, U.S. sale & leaseback (S&LB) transaction and a small U.S. disposal. We expect EBITDAR leverage to fall to around 6.5x by end-2023, which combined with residual refinancing being addressed in the next 12-18 months, could position EG's rating for a single-notch upgrade,” the agency said in a press release.

The RWP on the secured debt reflects the expectation that disposal proceeds will be used to repay date. If so, Fitch said it would improve the recovery rating to RR2 from RR3.

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