S&P shifts Motor Fuel view to stable

S&P said it revised the outlook for CD&R Firefly 4 Ltd. (Motor Fuel Group) to stable from negative and affirmed its B issuer rating.

“High fuel margins and effective cost-cutting has allowed MFG to gradually expand its earnings in 2020, despite the volatility caused by the pandemic. MFG’s petrol stations and convenience stores were classified as essential retailers and were able to trade throughout the lockdowns implemented to curb the spread of Covid-19, although footfall and demand for fuel were both diminished,” S&P said in a press release.

The stable reflects the steady increase in headroom at the B rating level and expectations that even though fuel margins are expected to show a moderate decline in 2021, MFG will lower leverage so that debt-to-EBITDA gradually approaches 6.3x in 2021, S&P said.

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