Japan-Based Seven&i Holdings Downgraded Two Notches To 'A' On Speedway Acquisition; Outlook Negative

Seven&i Holdings said on May 15, 2021, that its U.S. subsidiary 7-Eleven Inc. has completed the acquisition of convenience store and gas station chain Speedway LLC. The holding company's credit quality has worsened materially because financing the deal entirely with debt substantially hurts its financial standing, despite the stronger business base resulting from the acquisition. We lowered by two notches to 'A' the long-term issuer credit ratings on Seven&i, Seven-Eleven Japan Co. Ltd., and 7-Eleven Inc. and lowered by one notch to 'A-1' the short-term issuer credit rating on Seven-Eleven Japan. We also lowered our issue ratings on Seven&i and 7-Eleven, and we removed all of the ratings from CreditWatch negative. The negative outlook

...May 20, 2021 - Seven & i Holdings said on May 15, 2021, that its U.S. subsidiary 7-Eleven Inc. has completed the acquisition of convenience store and gas station chain Speedway LLC. - The holding company's credit quality has worsened materially because financing the deal entirely with debt substantially hurts its financial standing, despite the stronger business base resulting from the acquisition. - We lowered by two notches to 'A' the long-term issuer credit ratings on Seven & i, Seven-Eleven Japan Co. Ltd., and 7-Eleven Inc. and lowered by one notch to 'A-1' the short-term issuer credit rating on Seven-Eleven Japan. We also lowered our issue ratings on Seven & i and 7-Eleven, and we removed all of the ratings from CreditWatch negative. - The negative outlook reflects our view that there is at least a one-in-three chance of the benefits of integration with Speedway being delayed, resulting in slower debt reduction over the next one to two years than we assume. TOKYO (S&P Global Ratings)...

Ratings Action