Research Update: Motorway Service Area Operator Applegreen Assigned Preliminary 'B-' Ratings; Outlook Stable

Causeway Consortium Holdings Ltd. is the holding company of Applegreen group, a motorway service area (MSA), trunk road service area (TRSA), and petrol-filling station (PFS) operator in Ireland, the U.K., and the U.S. Applegreen benefits from the captive nature of its MSA and TRSA operations and the lengthy concession contracts, providing some revenue and operational visibility, and underpinning its solid market positions and profitability. In our forecast, Applegreen will reach S&P Global Ratings-adjusted EBITDA of €375 million by 2026 (from about €290 million in 2023); however, its ambitious growth plans and related hefty--if somewhat discretionary--investments will result in persistently negative free operating cash flow (FOCF) after leases and high leverage with S&P Global Ratings-adjusted debt to EBITDA of 8.0x-9.0x through

...- Causeway Consortium Holdings Ltd. is the holding company of Applegreen group, a motorway service area (MSA), trunk road service area (TRSA), and petrol-filling station (PFS) operator in Ireland, the U.K., and the U.S. - Applegreen benefits from the captive nature of its MSA and TRSA operations and the lengthy concession contracts, providing some revenue and operational visibility, and underpinning its solid market positions and profitability. - In our forecast, Applegreen will reach S&P Global Ratings-adjusted EBITDA of 375 million by 2026 (from about 290 million in 2023); however, its ambitious growth plans and related hefty--if somewhat discretionary--investments will result in persistently negative free operating cash flow (FOCF) after leases and high leverage with S&P Global Ratings-adjusted debt to EBITDA of 8.0x-9.0x through 2026. - The group intends to issue a 535 million senior secured term loan B (TLB) and a 150 million revolving credit facility (RCF) to refinance the existing...

Research Update