Stonepeak Motion gets BB issuer rating after Castrol stake acquisition

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Stonepeak Motion BB rating

Highlights

Fitch assigned Stonepeak Motion PledgeCo Limited a final Long-Term Issuer Default Rating of 'BB' with Stable Outlook after acquiring a 65% stake in Castrol Group Holdings.
Fitch expects SP Motion's pro forma EBITDA gross leverage to hit 5.6x in 2026, with EBITDA moderating from USD1.1 billion in 2025 to USD961 million then recovering to USD1.2 billion in 2027.
Castrol’s independent sourcing model, strong brand, and ability to pass through cost inflation position it to weather current industry disruptions and commodity cost pressures.

Rating action follows leveraged Castrol deal

As reported by Fitch Ratings, Stonepeak Motion PledgeCo Limited received a final Long-Term Issuer Default Rating of 'BB' with a Stable Outlook, while the term loan B and senior secured notes issued by Stonepeak Motion Holdco Limited and Stonepeak Motion Finco LLC were assigned final 'BB+' ratings. The facilities are guaranteed jointly and severally by SP Motion and carry a Recovery Rating of 'RR2'.

Stonepeak has completed the acquisition of an indirect 65% stake in Castrol Group Holdings, giving the holdco control of the business while leaving meaningful minority interests in place. Fitch said the structure limits dividend leakage for at least the next five years through a contractual waterfall arrangement between shareholders.

Fitch said Castrol's credit profile is supported by its position as the world's third-largest lubricants supplier after Shell and Exxon, with operations in more than 150 countries, over 200 million consumers a year and 2.2 billion liters of third-party sales volumes in 2025. The agency also highlighted strong brand recognition, more than 2,800 OEM approvals and an asset-light sourcing and operating model as key strengths.

Market disruption and leverage remain key watchpoints

Fitch expects SP Motion's pro forma EBITDA gross leverage to reach 5.6x in 2026, with EBITDA moderating to USD961 million from USD1.1 billion in 2025 before recovering to USD1.2 billion in 2027. The agency said the debt sits at the holdco level rather than the Castrol operating company, making upstream cash flow important for debt service, although debt covenants are designed to keep the operating company unleveraged.

Current market conditions remain challenging because of the war in the Middle East, which is tightening supply, disrupting infrastructure and lifting raw material costs across the industry. Fitch said Castrol is comparatively well positioned to manage those pressures because its independent sourcing model gives it flexibility over base oil supply, formulation and arbitrage.

The rating case also reflects Castrol's ability to pass through cost inflation with pricing actions, typically over 12 to 18 months, and demand trends that broadly track GDP growth through vehicle fleet size and miles travelled. Fitch added that the company is expanding into EV fluids, thermal management, battery energy storage system cooling and other electrification segments as the lubricants market evolves.

Our earlier coverage of the IMF’s outlook for the Middle East and Central Asia highlighted how the ongoing war could trigger renewed disruptions to energy production, shipping routes, and critical infrastructure, weighing on regional growth in 2026 before an uneven rebound in 2027. We also noted that limited buffer capacity and tighter spare supply could amplify volatility, prompting policymakers to prioritize price stability and fiscal resilience to withstand future shocks.

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