- CrossAmerica Partners has seen its distributions walking on a proverbial knife-edge during 2021 trying to avoid a reduction.
- They have recently made a large acquisition of assets from 7-Eleven, and whilst this helps, the risks persist.
- Even in the best-case scenario possible, their distribution coverage would barely be adequate with little to no margin of safety.
- Their leverage will also remain very high and their liquidity is still weak despite their covenant leverage ratio seeing relief.
- Whilst this sounds bearish, I still believe that upgrading my rating to neutral is appropriate whilst waiting to see how this large acquisition is integrated.
For further details see:
CrossAmerica Partners: 7-Eleven Acquisition Helps But Distribution Cut Remains A Risk