S&P slices Seven & i

S&P said it cut by two notches to A its long-term issuer credit ratings on Seven & i Holdings Co. Ltd. and its subsidiaries Seven-Eleven Japan Co. Ltd. and 7-Eleven Inc. In addition, S&P lowered the senior unsecured ratings on Seven & i to A- and 7-Eleven to A. The agency also removed all the ratings from CreditWatch with negative implications, where they were placed them on Aug. 3.

“The downgrades follow completion of 7-Eleven's acquisition of U.S.-based convenience store and gas station chain Speedway LLC from its parent, energy company Marathon Petroleum Corp., for $21 billion (about ¥2.3 trillion). The announcement of this plan had prompted the CreditWatch placement,” S&P said in a press release.

“Our A- rating on Seven & i's senior unsecured debt is one notch lower than our long-term issuer credit rating on the issuer. This is because Seven & i's existing long-term senior unsecured debt and any unsecured debt it issues in future is further subordinated by 7-Eleven's considerable debt financing at a time when Seven & i's finances are worsening,” the agency explained.

The outlook is negative.

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