Fitch ups Stonegate secured rating

Fitch Ratings said it upgraded Stonegate Pub Co. Financing 2019 plc's senior secured instruments' senior secured rating to B+ with an RR2 recovery rating from B/RR3.

The upgrade “is based on the increased market valuation of Stonegate's pub portfolio, and a higher residual value calculation from the Unique portfolio,” Fitch said in a statement.

Concurrently, the agency placed Stonegate Pub Co. Ltd.’s B- issuer default rating and the senior secured rating and Leased and Tenanted Pubs 1 Ltd.’s CCC/RR6 subordinated rating on rating watch negative.

In explaining the RWN, Fitch said, “The RWNs reflect heightened refinancing risks and the prospect of a near-term downgrade if Stonegate is unable to address its £2.187 billion of senior secured debt maturing in July 2025. This may soon be proposed to debtholders given the recently-announced Apollo (Platinum) £638 million secured financing, the net proceeds of which will prepay some senior secured debt. An extension of the remaining July 2025 debt has yet to be formally proposed to existing lenders. The £400 million second-lien matures in March 2028.”

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