S&P gives FFP loan B-

S&P said it gave a B- rating to FFP Holdings Group Inc.’s planned non-fungible first-lien term loan due 2028.

Concurrently, the agency affirmed FFP’s B- issuer rating and the B- and CCC on its first-lien and second-lien term loans, respectively. The recovery rating on first-lien term loans is 3, indicating meaningful (50%-70%; rounded estimate: 55%) recovery in default. The recovery rating on the second-lien term loan is 6, indicating negligible (0%-10%; rounded estimate: 0%) recovery in default.

“The potential for operational missteps–including poor integration of recent acquisitions–presents material risk to our forecast going forward. FFP's core strategy for acquiring high-growth companies in the beverage extracts industry is highly dependent on favorable business conditions to support the high-multiples it has paid for these targets. This higher debt burden leaves little room for error integrating these companies,” S&P said in a press release.

FFP plans to use the loan to help buy Jaco Beverage Co. Inc.

The outlook is stable.

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