Moody’s trims Travelodge

Moody’s Investors Service said it downgraded to Caa1 from B3 the corporate family rating and to Caa1-PD from B3-PD the probability of default rating of Thame and London Ltd. (Travelodge).

Moody’s also downgraded to Caa1 from B3 the instrument rating of the £440 million senior secured notes due 2025 issued by TVL Finance plc. The agency also downgraded to B1 from Ba3 the rating of the £40 million revolving credit facility due 2024, borrowed by Full Moon Holdco 7 Ltd.

The agency changed the outlook to negative from stable.

“Travelodge’s revised ratings and negative outlook reflect the vulnerability of the company to the impact of the coronavirus on the travel and leisure sectors. Travelodge’s credit metrics, which were already relatively weak for the previous B3 rating (Moody’s adjusted gross leverage close to 9x in 2019 and Moody’s adjusted EBITA coverage ratio around 1x) are unlikely to quickly recover to the required levels even once the travel bans are lifted and the business will return into a more normal stance,” Moody’s said in a press release.

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