Moody's may upgrade Alimentation Couche-Tard

Moody's Investors Service said it placed Alimentation Couche-Tard Inc.'s ratings on review for possible upgrade, including the Ba2 secured bank loan rating, Ba3 $350 million 7½% senior subordinated note due 2013 and Ba2 corporate family rating.

Moody's said the review is prompted by the operating and balance sheet progress that the company has made since its December 2003 acquisition of Circle K. High motor fuel prices during 2005 provided an added boost to recent operating performance.

Leverage for the 12 months ended Oct. 9 was about 3x, EBIT covered interest expense by more than 3x and free cash flow to gross debt was around 19%, the agency said.

During the review for upgrade, Moody's said it will consider likely long-term levels of average unit volume and store level profitability, both on the front-end and for motor fuel.

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