S&P trims Franchise Group

S&P said it lowered its issuer credit rating on Franchise Group Inc. (FRG) to B from B+.

At the same time, S&P lowered the issue-level rating on the company’s second-lien term loan to CCC+ from B-. The B+ rating on the company’s first-lien term loan is unchanged.

The outlook is negative.

Franchise Group recently completed its acquisition by a buyer group that includes members of senior management and a consortium of lenders. They are acquiring the company in a take-private transaction.

“We now expect S&P Global Ratings-adjusted group leverage to remain above 5x through fiscal 2024 because of higher than expected additional debt to fund the acquisition,” S&P said in a news release.

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