Moody’s assigns B3 ratings to Telepizza

Moody’s Investors Service said it assigned a B3 corporate family rating and a B3-PD probability of default rating to Foodco Bondco, SAU (Telepizza), the parent company of Telepizza. Moody’s also downgraded to B3 from B2 the rating on the €335 million of senior secured notes due 2026 issued by Foodco Bondco. The outlook is stable.

Concurrently, Moody’s withdrew the B2 CFR, the B2-PD PDR and the stable outlook of Tasty Bondco 1, SAU. The withdrawal of the ratings and outlook of Tasty Bondco 1 and assignment of the ratings and outlook to Foodco Bondco follows a corporate reorganization whereby Foodco Bondco assumed all obligations in respect of the senior secured notes. Foodco Bondco, is the new top entity of the restricted group, Moody’s explained.

“The downgrade of the notes’ rating to B3 from B2 reflects our expectation that Telepizza’s credit metrics, which were already weak for the existing rating, will significantly deteriorate in 2020, as the company’s sales and earnings will suffer a double hit from the social distancing measures driven by the coronavirus outbreak and dire consumer sentiment on the back of a global recession that we expect in 2020,” said Igor Kartavov, Moody’s lead analyst for Telepizza, in a press release.

“The company’s credit metrics will likely remain weak through 2021, given the sensitivity of the pizza delivery market in Spain to macroeconomic slowdowns,” added Mr. Kartavov.

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