Moody's ups, rates Chefs loan B2

Moody's Investors Service said it upgraded the Chefs' Warehouse, Inc.'s corporate family rating to B2 from B3 and probability of default rating to B2-PD from B3-PD. Concurrently, the agency assigned a B2 rating to the company's planned term loan due 2029 to be issued by Chefs' Warehouse Parent, LLC and Dairyland USA Corp. The rating on the existing term loan due 2025 remains unchanged. The speculative grade liquidity rating was upgraded to SGL-1 from SGL-2.

"Chefs is benefiting from a strong recovery in dining out, with earnings now exceeding pre-pandemic levels," said Raya Sokolyanska, a Moody's vice president and senior analyst, in a press release. "While volatile product costs and labor shortages remain a challenge, we expect growth in operating performance to continue. Chefs' end customers, which tend to have higher income levels, are also more protected from macroeconomic pressures."

Proceeds from the proposed $250 million term loan will be used to refinance the outstanding term loan with an outstanding amount of $168 million, add about $66 million of balance sheet cash, and pay for transaction fees and expenses.

The outlook for Chefs' Warehouse remains positive.

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