S&P rates BCPE Grill Parent, loans B-

S&P said it assigned B- ratings to BCPE Grill Parent Inc. and its planned senior secured credit facilities, consisting of a five-year $75 million revolving credit facility and a seven-year $550 million first-lien term loan. The recovery ratings on the loan is 3. The outlook is stable.

Fogo de Chao Inc. is being acquired by Bain Capital Private Equity from Rhone Capital for $1.1 billion, funding the transaction with a $550 million term loan, $509 million of combined equity and $100 million of preferred equity.

“Our rating on Fogo reflects its high leverage and position as a small, single-brand restaurant operator pursuing elevated new unit growth. The sponsor-to-sponsor sale adds approximately 2.3 turns of leverage on an S&P Global Ratings-adjusted basis, inclusive of the preferred equity, which we treat as debt. We project S&P Global Ratings-adjusted leverage will be around 6.5x at the end of fiscal 2023 before approaching 6x in fiscal 2024 and expect S&P Global Ratings-adjusted EBITDA interest coverage will remain in the 2.0x-2.5x range over the next two years,” S&P said in a press release.

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