S&P rates Restaurant Brands Iberia notes, loan B

S&P said it assigned its preliminary B long-term issuer credit rating to Elvis UK Holdco Ltd., parent of Restaurant Brands Iberia (RBI), and its preliminary B issue-level rating and preliminary 3 recovery rating to the group's proposed €688 million of first-lien debt.

The outlook is positive.

Elvis UK Holdco plans to issue €538 million of senior secured notes and a €150 million senior revolving credit facility. Coupled with about a €690 million equity injection mainly comprising preference shares, the proceeds will allow new majority shareholder, financial sponsor Cinven, to acquire a 71% stake in RBI from its previous owners.

“The positive outlook reflects the possibility of an upgrade over the next 12-18 months if the group continues to successfully grow its like-for-like revenue while preserving S&P Global Ratings-adjusted operating margins at 23%-25%, despite the sizable expansion plan, which will likely lead to our adjusted leverage trending below 4.5x in 2022,” S&P said in a news release.

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