Luxembourg-based visitor attractions operator Merlin Entertainments S.a.r.l. (Merlin) has consistently reported solid operating and financial results, despite the weak economic conditions and a challenging environment for discretionary spending. We believe the business should remain resilient in the next 12-24 months, with broadly stable like-for-like industry performance indicators. Further growth in the top line and profitability will in our opinion be driven mainly by acquisitions and new openings. We are therefore raising our long-term corporate credit rating on Merlin to 'B+' from 'B' and our senior secured debt rating on the group to 'BB-' from 'B+'. The stable outlook reflects our view that Merlin will likely post steady EBITDA increases, consistently maintaining its Standard&Poor's-adjusted leverage at less than 5.5x
