S&P hikes Nathan’s Famous secured notes

S&P said it raised Nathan's Famous Inc.’s senior secured notes to BB- from B after partial early redemptions, the latest of which was Tuesday. With fewer notes outstanding, the agency raised the recovery rating to 1 from 3, reflecting very high (90%-100%; rounded estimate: 95%) recovery in default.

The agency also revised the outlook to positive from stable and affirmed the company’s B issuer rating.

“The company has steadily repaid debt over the last two years and reduced leverage close to 2x. We now believe there is an increased possibility the company will continue to operate with low leverage. Its only debt outstanding is its $60 million 2025 secured notes, which will become current in November 2024,” S&P said in a statement.

The positive outlook reflects the view that Nathan’s Famous will keep its leverage low. “Absent a releveraging event over the next 12 months, we could raise our ratings if the company sustains EBITDA interest coverage above 3x and continues to generate positive free cash flow,” S&P said.

© 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.