Moody's rates Tasty Bondco notes B2

Moody's Investors Service said it assigned a first-time corporate family rating of B2 and a probability of default rating of B2-PD to Tasty Bondco 1, SAU, parent company of Tele Pizza SAU.

Moody's also said it assigned a B2 rating to the proposed seven-year €335 million worth of senior secured notes to be issued by Tasty Bondco 1.

The outlook is stable.

The rating assignment follows private equity firm KKR's offer to take private Telepizza through a process launched in December 2018, the agency explained.

The acquisition will be financed with new equity provided by KKR and the issuance of a new €335 million worth of senior secured notes, Moody's said.

The ratings reflect the company's strong market positions in Spain, Portugal and a number of Latin American markets, the upside potential offered by the license agreement to exploit the Pizza Hut brands in Latin America and the company's vertical integration, the agency said.

The ratings are constrained by the relatively small size of the company, high competition in the food-service industry and potential earnings and cash flow volatility due to exposure to raw material prices and foreign-currency fluctuations, Moody's said.

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