S&P rates HMK Mattress loan B-

Standard & Poor's said it assigned a B- corporate credit rating to HMK Mattress Holdings LLC (Sleepy's).

The outlook is stable.

S&P also said it assigned a B- rating with a 3 recovery rating to the $170 million term loan issued by subsidiary HMK Mattress Intermediate LLC.

The 3 recovery rating indicates 50% to 70% expected recovery in a default.

The proceeds will be used to fund a $278 million dividend to existing shareholders and refinance about $32 million in mortgage notes and other existing indebtedness, S&P said.

The ratings reflect an expectation that moderate operational improvement and consistent cash flow generation will offset the relatively large debt load the company is acquiring in the transaction, S&P said.

The ratings also are based on its highly leveraged financial risk and vulnerable business risk, the agency 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.