S&P gives El Pollo Loco loans B, CCC

Standard & Poor's said it affirmed its B- corporate credit rating on El Pollo Loco Inc.

The outlook is stable.

At the same time, the agency assigned a B issue-level rating with a 2 recovery rating to the proposed $190 million senior secured credit facility. The 2 recovery rating indicates an expectation for substantial (70% to 90%) recovery of principal in the event of a payment default.

S&P also assigned a CCC issue-level rating and 6 recovery rating to the company's new second-lien term loan. The 6 recovery rating indicates an expectation for negligible (0% to 10%) recovery of principal in the event of a payment default.

El Pollo Loco is refinancing its senior secured facility and second-lien debt to reduce interest costs, extend maturities and fund other expenses related to the transaction.

"The rating on El Pollo Loco Inc. reflects Standard & Poor's Ratings Services' assessment that the company's business risk profile will remain 'vulnerable' and the financial risk profile will remain 'highly leveraged' in the coming year," S&P credit analyst Diya Iyer said in a news release.

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