Moody's assigns Luihn VantEdge B3

Moody's Investors Service said it assigned first-time ratings to Luihn VantEdge Partners, LLC, including a B3 corporate family rating, B3-PD probability of default rating, B2 senior secured first-lien credit facility rating and Caa2 senior secured second-lien term loan rating.

LVE Partners is planning to raise $395 million to fund the purchase of 59 restaurants, including 58 Taco Bell restaurants and one Kentucky Fried Chicken restaurant, in metro Atlanta. The acquisition will be funded with a seven-year $280 million first-lien term loan and an eight-year $65 million second-lien term loan. The planned bank credit facility also includes an undrawn five-year revolving credit facility$50 million.

“LVE Partners' credit profile is constrained by its high leverage, smaller scale relative to Moody's rated restaurant peers and the potential for future debt-funded acquisitions as the company seeks strategic growth. LVE Partners' will have 231 locations at the end of 2021 (including three planned new store openings) and revenue is estimated to be less than $400 million, which is small relative to other quick service restaurant operators in our coverage universe,” the agency said in a press release.

The B2 rating on the first-lien facility reflects the support provided by the $65 million second-lien term loan. The Caa2 rating on the second-lien term loan, two notches below the corporate family rating, reflects the material amount of first-lien debt ahead of it in the capital structure, Moody’s said.

The outlook is stable.

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