Couche-Tard (ATDBCN; Baa1, BBB+ S) Our thoughts....

• On consumer spending weakness; mgmt relatively confident on eventual turnaround and we would note its been relatively staple like in sales historically (particularly relevant given names it trades in-line with in €).
• On M&A; We do see risk leverage moves above current rating thresholds (Moody's >3.5*) given mngmt sees $10b of room in BS for acquisitions (cash & eqv's is $1b with debt at $14.7b - consensus FY24/25 EBITDA at ~$6b). But we'd note 1) that would be well above company target for 2.25* & 2) management has a history of successfully deleveraging post acquisitions into below target levels (hence why no hard ceiling for Moody's and only downgrade on "sustained increases").

Stock's struggling this morning, cash lines in € and $ are unch. We don't see any credit risk on the earnings, €26 & newly issued 31 & 36's screens wide on what we assume is a reverse yankee discount. We like the €26's at Z+52 & 31's at +100 - both trade +25-30bps from equal rated F&B names & still wide of smaller issuers like Maersk who is facing a more challenging outlook.