Punch / Stonegate - comment

S&P has been resetting their expectations for the New Normal equilibrium in UK Pub revenues, ending all allowances and adjustments that followed the pandemic. Consequently, the ratings firm reduced its assessment of Greene King, but the same rationale could also be applied to Punch and Stonegate (the latter arguably even more so) and mirrors similar recent action from Fitch and Moody’s on Stonegate. We think those reduced expectations are spot on and continue to worry about Stonegate.