KBRA Downgrades to BBB from BBB+ and Changes the Outlook to Stable for FCT OL StadCo’s EUR320 Million Senior Secured Notes
15 Jul 2026 | Dublin
KBRA downgrades the rating on FCT OL StadCo's (StadCo) EUR320 million secured notes due June 2044 from BBB+ to BBB and revises the Outlook to Stable from Watch Developing. KBRA considered the recent change of control under which Ms Michele Kang assumed control of Olympique Lyonnais (the Club) and the related amendments to the financing, concluding that they do not constitute a default as senior Noteholders are not expected to suffer any economic loss, with deferred debt service capitalised and repaid over the remaining life of the notes without extending final maturity. KBRA notes that the amendment was approved unanimously by Noteholders. In KBRA’s opinion, the structure and club performance would have allowed debt service to continue to be maintained, even if the amendments had not been agreed to.
While the amendments introduce the ability to strengthen the security package through the introduction of a fiducie-sûreté, KBRA notes that the revised repayment profile reduces the average projected Debt Service Cover Ratio and that the amendments have underlined an increased interaction between the StadCo financing and the wider club financing than is typically observed in project finance transactions. KBRA also notes that while Noteholders have the ability to utilize the Debt Service Reserve during the Deferred Payment Period, if this right is exercised the Issuer has an extended time within which to refill the account.
The revised rating also reflects StadCo's strong 2025/26 operating performance, supported by Olympique Lyonnais' on-field success, including participation in the UEFA Europa League and qualification for the 2026/27 UEFA Champions League play-off round, which drove stronger-than-expected matchday and commercial revenues.
Key Credit Considerations
(+) StadCo Financial Performance
StadCo performance has been robust throughout the 2025/2026 with secured revenue generation improving due to increased matchday ticketing and other revenue as a result of OL’s participation in the Europa League, progression through domestic cups and qualification to the 2026/27 UEFA Champions League qualification phase.
(+) Change of Control
KBRA views the Change of Control as a credit positive, reflecting Ms Michele Kang's constructive engagement with both the senior creditor group and the DNCG.
(-) Amendments to Key Financing Terms
Senior creditors under both the StadCo and RCF facilities agreed to a package of amendments to facilitate Ms Michele Kang's acquisition and broader turnaround plan for the club. Key amendments include an 18-month debt service deferral, with unpaid interest capitalised at 6.0%, revised DSRA utilisation and replenishment mechanics, a reprofiling of the amortisation schedule without extending final maturity, and the ability to introduce a fiducie-sûreté to strengthen the security package. KBRA concluded that the amendments do not constitute a distressed restructuring or default, as creditors are not expected to incur an economic loss and unanimously agreed to the amendments to support Ms Kang’s future plans for the Club. However, it is noted that the revised repayment profile results in weaker projected DSCRs. It is also noted that the Rating Agency Confirmation provision associated with a Change of Control has been removed and that the Debt Service Reserve Account top-up mechanism has been diluted if certain circumstances apply.
(-) Continued Litigation Risk
No material developments have been identified in relation to the disputed Botafogo creditor claims. OL continues to dispute liability and, to KBRA’s knowledge, no formal determination or court ruling has been made on the matter. As such, the claims remain subject to potential litigation and the associated legal and financial risk remains unchanged.
Surveillance Rating Rationale
Under KBRA’s rating and stress cases, the assigned revenues are sufficient to repay debt service. The rating is based on a KBRA Project Risk Score (KPRS) of Average and a sound financial risk profile with an average debt service coverage ratios (DSCR) of 2.51x, which, along with fully amortising debt and strong cash flow resiliency, support the rating on the notes.
Outlook
The revised Stable outlook reflects OL’s robust performance for the 2025-26 season, in which the club finished 4th in Ligue 1 and qualified for the UEFA Champions League qualification play-offs leading to strong attendances and ticket sales. The outlook also reflects the acquisition of the club by Ms Michele Kang and associated amendments to the StadCo financing structure noting that DSCR metrics remain robust.
Rating Sensitivities
An upgrade is unlikely as the club and, by extension, the issuer is indefinitely exposed to the risk of relegation.
A rating downgrade could occur if the new ownership fails to successfully execute its turnaround plan, resulting in a material deterioration in the club's financial or operational profile that adversely affects the project's ability to generate secured revenues. This could arise through sustained weaker on-field performance leading to reduced attendances, lower commercial and sponsorship revenues, diminished merchandising and event income, or relegation resulting from sporting underperformance or financial mismanagement. A downgrade could also result from a broader deterioration in Olympique Lyonnais' credit profile that materially weakens the cash flow generation supporting the StadCo financing.
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