- CrossAmerica Partners saw their cash flow performance surge during the first quarter of 2022 with their newly acquired assets from 7-Eleven enjoying both strong wholesale fuel margins and volumes.
- Despite these extraordinary times, sadly, their distributions remain oversized even though they also reduced their capital expenditure.
- Meanwhile, their leverage also is very high despite this stronger financial performance and lower net debt following a preferred equity issuance.
- Most importantly, their credit facility covenant leverage ratio is still materially above its upcoming limit at the end of September.
- These factors make a distribution reduction likely and thus given the lack of improvements, I believe that maintaining my hold rating is appropriate.
For further details see:
CrossAmerica Partners: Distribution Reduction Is Still Likely Despite The Extraordinary Times