S&P: Chobani loans B+, CCC+

S&P said it assigned a B corporate credit rating to Chobani Global Holdings LLC and the borrower, Chobani LLC.

The agency also said it assigned a B+ rating and 2 recovery rating to the company's proposed $150 million revolving credit facility due in 2021 and $650 million first-lien term loan due 2023. The 2 recovery rating indicates 70% to 90% expected default recovery.

S&P also said it assigned a CCC+ rating and 6 recovery rating to the company's existing $750 million second-lien term loan due in 2020. The 6 recovery rating indicates 0 to 10% expected default recovery.

The outlook is stable.

The proceeds will be used to repay about $334 million under its existing revolving credit facility, repay $281 million of the existing second-lien term loan and pay estimated fees and expenses, the agency said.

The ratings reflect Chobani's highly leveraged capital structure, narrow business focus in Greek yogurt that is vulnerable to changing consumer tastes and preferences, substantial exposure to dairy price fluctuations and participation in a highly competitive industry against larger packaged food companies, S&P said.

The ratings also consider the company’s good brand recognition and scale with revenues approaching about $1 billion in 2016, although concentrated primarily in the United States, 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.