Fitch: Whitbread notes BBB

Fitch Ratings said it affirmed Whitbread plc’s long-term issuer default rating at BBB with a stable outlook and short-term rating at F2.

Fitch also said it assigned an expected senior unsecured rating of BBB to Whitbread’s £450 million due 2025 to be issued by Whitbread Group plc, a 100% subsidiary of Whitbread.

The proceeds will be used for general corporate purposes, including capital expenditure, the agency said.

The ratings are supported by its leading position in the less cyclical U.K. budget hotel business with its Premier Inn brand and its growing Costa Coffee shop network, Fitch said.

Fitch said it expects Whitbread’s operating performance to remain positive thanks to the group’s strong expansion strategy in its two core business units.

However Whitbread’s significant expansion capital expenditure is expected to increase leverage slightly above the agency’s leverage-rating guideline, Fitch added.

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