Moody’s assigns Franchise Group, notes B1

Moody’s Investors Service said it assigned first-time ratings to Franchise Group, Inc., including a B1 corporate family rating, a B1-PD probability of default rating and a B1 rating to its proposed $650 million senior secured notes.

Proceeds will be used to refinance Franchise Group’s debt, raise additional capital for general corporate purposes and pay transaction-related fees and expenses.

“Franchise Group’s B1 CFR reflects its moderate financial leverage, with estimated lease-adjusted debt/EBITDAR of around 3x and EBIT/Interest of around 2x for the latest twelve months ended June 30, 2020, pro forma for the full year effect of recent acquisitions and the proposed refinancing transaction,” Moody’s said in a press release.

Concurrently, Moody’s said it assigned an SGL-2 speculative grade liquidity rating, reflecting its expectation for good liquidity.

The outlook is stable.

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