S&P gives Weight Watchers facility B

S&P said it assigned a B issue-level rating to Weight Watchers International Inc.’s proposed first-lien credit facility (including a $150 million revolving credit facility due in 2022 and a $1.39 billion term loan B due in 2024).

The recovery rating is 3, indicating an expectation of meaningful (50%-70%, rounded estimate: 65%) recovery in the event of a payment default.

The company intends to use the proceeds from this issuance and a future issuance to refinance its existing $2.1 billion term loan B due 2020 and its $50 million revolving facility due 2018.

S&P said the offering will be leverage neutral, and it expects the company will end 2017 with leverage around 6x and declining to mid-5x by the end of 2018 as a result of another successful winter recruiting season and continued improving membership retention rates.

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