S&P rates Blue Ribbon, B- loan B

S&P said it assigned Blue Ribbon LLC (Pabst) a B- issuer rating and B with 2 recovery ratings to Blue its planned $420 million senior unsecured bank credit facility. The 2 rating indicates substantial (70%-90%; rounded estimate: 70%) recovery in default.

Concurrently, the agency upgraded Blue Ribbon Intermediate Holdings LLC’s rating to B- from CCC and then withdrew the rating. Pabst is the operating company and issues the financial statements.

Blue Ribbon Intermediate and Pabst used proceeds from the sale of equipment related to the Irwindale brewery and an equity contribution from owner Blue Ribbon Partners to reduce its debt. The debt paydown reduced leverage by almost two turns to 5.4x from 7x as of Dec. 31.

“The upgrade reflects the company's improved financial flexibility and liquidity following the refinancing, lower debt levels and less aggressive financial policy with the removal of financial sponsor Oaktree as a minority owner,” S&P said in a press release.

The outlook is positive, mirroring an expectation of improving EBITDA and continuing declines in leverage, the agency said.

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