S&P rates Soho House notes B-

Standard & Poor's said it assigned a B- preliminary long-term corporate credit rating to BN TopCo Ltd. (Soho House).

The outlook is stable.

The agency also said it assigned a preliminary B- rating to Soho House's proposed £105 million senior secured notes, in line with the preliminary corporate credit rating on the company. The preliminary recovery rating on the proposed notes is 4, indicating 30% to 50% expected default recovery.

The ratings are based on an assumption that, in the next few months, the company will refinance its outstanding debt by issuing £105 million of senior secured notes due in 2018; sign a £25 million revolving credit facility due in 2018 with at least £20 million undrawn at closing; and repay its existing debt, which stood at £104 million as of June 30, S&P said. The agency also said it assumes that shareholder loans will total about £20 million.

The ratings also reflect the company's highly leveraged financial profile and weak business profile, S&P said.

Soho House's sizable debt and negative free operating cash flow constrain the company's financial risk profile, the agency added.

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