Moody's assigns B1 to Franchise add-on

Moody's Investors Service said it assigned a B1 rating to Franchise Group, Inc.'s planned $200 million add-on senior secured first-lien term loan.

All other ratings are unchanged, including the B1 corporate family rating, the B1-PD probability of default rating, the B1 senior secured first-lien term loan rating, and the B3 senior secured second-lien term loan rating. The company's SGL-3 speculative grade liquidity rating is also unchanged.

Franchise Group will use the proceeds to refinance borrowings under the company's unrated $400 million asset-based lending revolver.

“The refinancing transaction is leverage neutral and frees up additional borrowing capacity under the revolver to support cash flow needs over the next 12 months. However, the refinancing will increase Franchise Group's interest expense and reduce its already weak interest coverage,” Moody’s said in a press release.

The outlook remains negative.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.