Fitch reviews P4, rates Play notes B-

Fitch Ratings said it placed P4 Sp. zoo's (Play) long-term issuer default rating of B+ on Rating Watch Positive (RWP) and affirmed the national long-term rating at BBB-(pol)/stable.

At the same time, the agency assigned an expected rating of B-(EXP)/RR6 to Play Topco SA's PIK toggle notes.

Fitch said the positive watch takes into account P4's consistently strong market performance, having steadily transformed itself from market challenger to the market number-two by subscriber numbers.

“Operational strength has been accompanied by solid financial results, including double-digit revenue growth, solid margin expansion and strong underlying free cash flow (FCF). Fitch views the proposed PIK toggle instrument as sufficiently ring-fenced from the senior restricted group to be excluded from P4's consolidated metrics for IDR purposes,” the agency said in a news release.

“The leverage policy adopted by management at Play is consistent with a higher rating, with BB- expected to be assigned once the PIK note closes and the overall group leverage is clear.”

Fitch said it assigned Play Topco an expected issuer default rating of B+(EXP) based on its parent subsidiary linkage, reflecting the subordination of the cash flow streams used to service its debt to those of the P4 restricted group.

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