S&P gives Flynn Restaurant loans B, CCC+

S&P said it assigned its B corporate credit rating to Flynn Restaurant Group LP. The outlook is stable.

At the same time, the agency assigned its B issue-level rating to Flynn's proposed first-lien debt, consisting of a $60 million cash flow revolver due in 2023 and a $400 million term loan facility due in 2025.

The 3 recovery rating indicates an expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default.

Additionally, the agency assigned its CCC+ issue-level rating to Flynn's proposed $100 million second-lien term loan. The 6 recovery rating indicates an expectation for negligible (0%-10%; rounded estimate: 0%) recovery.

“The ratings on Flynn reflect its participation in the intensely competitive restaurant industry, exposure to fluctuations in commodity prices, rising labor costs, and our expectation for an aggressive financial policy,” S&P said in a news release.

“These factors are partly offset by the company's fairly sizable operation scale and its portfolio of multiple nationally recognized restaurant brands operating in multiple segments, which helps diversify its revenue streams and commodity cost exposure.”

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