S&P rates Monogram Food, loans B

S&P said it gave B ratings to Monogram Food Solutions LLC and its planned $100 million five-year revolver and $435 million seven-year term loan. The loans’ recovery rating is 3, indicating an expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in default.

PPC Investment Partners LP and co-investors will use the proceeds to help finance the purchase of controlling stake in Monogram, refinance the capital structure and provide funds for ongoing business needs.

“We expect Monogram will demonstrate aggressive financial policies under the control of PPC. S&P Global Ratings expects Monogram's credit ratios will remain highly leveraged, including adjusted debt to EBITDA above 5x. We estimate that pro forma adjusted leverage at close is about 6.2x,” S&P said in a press release.

The outlook is stable, reflecting the forecast that Monogram will continue to profitably add new business and modestly expand adjusted EBITDA margins such that it sustains S&P Global Ratings-adjusted leverage between 5.5x-6x over the next year, the agency said.

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