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S&P affirms BB rating on Cardtronics following earnings guidance update

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S&P affirms BB rating on Cardtronics following earnings guidance update

S&P Global Ratings affirmed its BB corporate credit rating on Cardtronics PLC with a stable outlook.

The Houston-based company's reported revenue growth and its higher 2018 adjusted EBITDA guidance do not affect its forecasted credit metrics, the rating agency said. Factors that could weaken its metrics in 2018, however, include Cardtronic's loss of its 7-Eleven contract and market pricing pressures affecting its businesses in the U.K. and Australia.

S&P wrote that it expects Cardtronics' EBITDA margins to fall to the low end of the 20% range. As a result, it continues to expect the adjusted debt-to-EBITDA ratio to increase to the mid-3x range in 2018, with some deleveraging after. The agency also expects free operating cash flow of at least $90 million for the year.

The stable outlook reflects expectations that adjusted debt-to-EBITDA will not exceed 4x over the coming year and that the company will return to organic EBITDA growth in 2019, due to low single-digit percentage global cash usage, ATM unit growth and stable to expanding EBITDA margins.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.