The rating on Luxembourg-based Merlin Entertainments S.a.r.l. (Merlin) reflects Standard&Poor's Ratings Services' view of the group's "highly leveraged" financial risk profile and its "fair" business risk profile. Merlin's high debt leverage, relatively high capital expenditure (capex), and significant operating lease liabilities underpin our view of the group's financial risk profile as "highly leveraged." Mitigating Merlin's highly leveraged capital structure is our assessment of the group's liquidity profile as "adequate," which gains support from our view of the group's fairly flexible capex. We understand that maintenance capex is about £25 million-£30 million per year, and that Merlin can cut expansionary and development capex quite quickly in the event of adverse market developments. Moreover, our projection of the EBITDA interest
