S&P revises EG outlook to positive

S&P said it revised its outlook for EG Group Ltd. to positive from stable and affirmed the B- issuer and senior secured debt ratings and CCC second-lien debt rating.

“The planned debt repayment and completion of the A&E transaction will reduce the refinancing risk and delever the company's balance sheet. We view as positive the steps EG Group has taken so far and its intention to address the upcoming debt maturities and reduce its very high debt burden. However, the A&E transaction is expected to close only in the fourth quarter of 2023, once the disposal of the U.K. and Ireland operations is completed.

“This will follow the early repayment of the €300 million senior secured notes due 2024 and the prepayment of 50% of the proceeds from the sale and lease back. As well as repaying about $4.2 billion of financial debt, the group plans to extend the maturity of its remaining $3.5 billion term loans to 2028, for which it is currently seeking lenders' consent,” the agency said in a statement.

The positive outlook reflects the position that EG will be successful in its refinancing plans, S&P said.

“We forecast leverage to fall toward 9x in 2023 and 8x in 2024 (on our adjusted basis) as a result of the debt repayment and expected improvement in profitability margins,” S&P said.

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