S&P gives B to T&L, ups notes to B

S&P said it assigned a B issuer rating to T&L Holdco Ltd., above Thame and London Ltd. (Travelodge), and withdrew Thame and London’s B- issuer rating. The agency also raised the issue rating on the senior secured notes issued by TVL Finance plc to B from B- with a 3 recovery rating and a recovery estimate of 65% (from 55% previously). The outlook is stable.

T&L is a new holding company, which follows the acquisition of 66 hotels in February.

“The group's 2023 results were marginally above our expectations, generating strong cash flow and allowing deleveraging. Travelodge reported revenue of above £1 billion for the first time, with S&P Global Ratings-adjusted EBITDA margin at 47.6%, falling marginally from 49.4% in the previous year due to inflationary pressures and a higher minimum living wage in the U.K. This was, however, above our initial EBITDA margin expectations of 46%, thanks to the group's tight cost control and efficiencies,” the agency said in a press release.

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