S&P rates Twinkle Pizza notes B, CCC+, revolver BB-

Standard & Poor’s said it assigned a preliminary B long-term corporate credit rating to Twinkle Pizza Holdings plc.

The outlook is stable.

The agency also said it assigned a preliminary B long-term issue rating to the group’s proposed £410 million senior secured notes. The preliminary recovery rating on the notes is 3, indicating 50% to 70% expected default recovery.

S&P also said it assigned a CCC+ preliminary long-term issue rating to the group’s proposed £200 million senior unsecured notes. The preliminary recovery rating on the notes is 6, indicating 0 to 10% expected default recovery.

The agency also said it assigned a preliminary BB- long-term issue rating to the group’s proposed £30 million super senior revolving credit facility. The preliminary recovery rating on the revolver is 1, indicating 90% to 100% expected default recovery.

The preliminary ratings reflect PizzaExpress’s fair business risk profile and highly leveraged financial risk profile, S&P said.

The ratings also consider its well-established market position in the highly competitive and cyclical U.K. restaurant sector, the agency said.

PizzaExpress is exposed to changing trends in consumers’ discretionary spending and volatile commodity prices, S&P said, and has currently limited geographic diversification outside the United Kingdom.

These weaknesses are alleviated by the company’s strong brand and market-leading position in the U.K. casual dining segment, the agency said.

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