S&P gives Dave & Buster’s CCR B+

Standard & Poor's said its ratings on Dave & Buster's Entertainment Inc. are unchanged and it assigned a B+ corporate credit rating to the company's indirect operating subsidiary, Dave & Buster's Inc.

The corporate credit rating on Dave & Buster's Inc. is same as its ultimate parent. Financials are issued at Dave & Buster's Entertainment; the agency analyzes the company on a consolidated basis.

S&P said the ratings reflect Dave & Buster's participation in the restaurant and out-of-home entertainment industries, which the agency believes remains intensely competitive.

It differentiates itself from other restaurants by offering a large array of game entertainment options, which contribute about half of its revenues. It plans to open about seven to eight new stores annually; store execution risks remain if it pursues new locations with competing entertainment alternatives and unfavorable population demographics.

S&P forecasts leverage in the mid-4 times area in the next year, as earnings growth will partly mitigate higher lease-adjusted debt associated with new stores. The agency also considers financial sponsor Oak Hill Capital's significant ownership of the company and influence over financial policies, which could impair credit protection measures if debt-funded shareholder initiatives are pursued.

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