Fitch assigns Formula 1 BB, loans BB+

Fitch Ratings said it assigned Delta Topco Ltd. (Formula 1) a first-time expected BB long-term issuer default rating with a stable outlook. The agency also rated Delta 2 (Lux) Sarl's loans an expected BB+/RR2 senior secured instrument rating

The ratings are based on Formula 1's planned refinancing of its $2.9 billion of term loans and $500 million debt reduction, the agency said.

“Formula 1's ratings reflect its highly cash-generative business model with strong revenue visibility supported by multi-year and mostly fixed-fee contracts. Capacity for further growth in the U.S. and other regions is underpinned by the record popularity of the FIA Formula One World Championship (F1) with attendance and viewership levels growing strongly year on year. The ratings also reflect limited diversification, moderately high leverage and uncertainty over its China race,” Fitch said in a press release.

The stable outlook reflects the view that funds from operation leverage will fall within the BB threshold in 2023 of below 4x, the agency noted.

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