S&P applies B to Wagamama notes

S&P said it affirmed the B long-term corporate credit rating on Mabel Topco Ltd., the parent of Wagamama.

The outlook is stable.

At the same time, the agency assigned a B issue rating to the proposed £225 million senior secured notes due 2022. The recovery rating is 4, indicating an expectation of average recovery prospects (rounded estimate: 35%) in the event of a payment default.

S&P also affirmed the B issue rating and 4 recovery rating on the existing £150 million senior secured notes due 2020, and the BB issue rating and 1+ recovery rating on the existing £15 million super senior revolving credit facilities. It will withdraw the issue and recovery ratings on the existing notes and revolver once the refinancing transaction is completed.

S&P said the affirmation follows Wagamama's announcement that it plans to refinance its £150 million 7 7/8% senior secured notes due 2020 by issuing £225 million senior secured notes due 2022.

Despite the higher debt level, the agency anticipates the group will benefit from a cash interest saving of £2 million per year thanks to the currently low interest rates. The refinancing transaction also involves £62 million shareholder returns through the partial redemption of its unsecured loan notes.

Owing to high capital investment and increased cash pay debt, S&P said it sees limited ratings headroom for softening operating performance after refinancing.

© 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.