S&P raises Dave & Buster's

Standard & Poor's said it raised its ratings on Dave & Buster's Inc., including the corporate credit rating, to B from B-.

At the same time, the agency said it placed the ratings on CreditWatch with positive implications.

The upgrade reflects the enhanced credit metrics from improved operating performance over the past two years, S&P said, adding that the CreditWatch action comes as the parent company, Dave & Buster's Holdings Inc., filed an S-1 for a possible IPO.

At the end of the company's first quarter, operating lease-adjusted debt to EBITDA on a last 12 months basis improved to 5.2x, down from 7.7x at the same point two years ago, the agency noted.

Interest coverage improved to 2.0x from 1.4x over the same period, S&P said, adding that the ratings on Dave & Buster's reflect its still highly leveraged capital structure that results in weak cash flow protection and its participation in the highly competitive casual-dining restaurant and out-of-home entertainment industries.

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