S&P gives Flynn Restaurant facilities B

S&P said it assigned B issue-level and 3 recovery ratings to Flynn Restaurant Group LP's planned $80 million revolving credit facility due 2026 and affirmed its 3 recovery rating on its amended and extended $1.05 billion first-lien term loan due 2028, upsized from $592 million previously due 2025. The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in default. The issue rating on the loan also is B.

Term loan proceeds are expected to refinance Flynn’s second-lien term loan and credit facilities at the Flynn Borrowing Group and Apple American Group entities, as well as to repay its preferred equity.

“We expect the proposed transaction to be leverage neutral as we had incorporated Flynn's preferred equity in our measure of its adjusted leverage,” S&P said in a press release.

Flynn is considering folding its Applebee's (Apple American Group) operations into the current borrowing group, which includes Bell American, Pan American, and RB American. “The rated debt facilities will be guaranteed by Flynn's Applebee's, Taco Bell, Panera Bread and Arby's operations through a restricted credit group structure that excludes its Wendy's (Wend American Group) and Pizza Hut (Hut American Group) operations,” S&P said.

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