Moody’s reviews Motor Fuel for haircut

Moody's Investors Service said it placed CD&R Firefly 4 Ltd.'s (Motor Fuel Group) B2 long-term corporate family rating and B2-PD probability of default rating on review for downgrade. Simultaneously, the agency placed the B2 ratings of CD&R Firefly Bidco Ltd.'s backed senior secured bank credit facilities on review for downgrade. Previously, the outlook on both entities was positive.

On Wednesday, MFG and Market Holdco 3 Ltd. (Morrisons) announced they agreed that MFG will acquire 337 petrol forecourts and more than 400 associated sites for electric vehicle charging development from Morrisons. The transaction is valued at £2.5 billion, with Morrisons taking a minority stake of about 20% in MFG, valued at £550 million. The transaction is expected to close in the second quarter of 2024 and is subject to customary regulatory approvals.

“The review for downgrade will focus on the funding of the transaction and its impact on MFG's capital structure, as well as the potential increase in leverage. The review will also focus on the business plan and assess the impact on MFG's business profile with the additional sites from Morrisons. Limited information is available from MFG on the transaction at this stage and based on Moody's preliminary analysis any potential downward rating action could be limited to an outlook change rather than a one-notch downgrade,” Moody’s said in a press release.

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