S&P rates Checkers Holdings B-

S&P said it assigned its B- corporate credit rating to Checkers Holdings Inc. and parent Burger BossCo Intermediate Inc.

The outlook is stable.

The B- issue-level ratings on the company's $25 million first-lien revolver and $192.5 million first-lien term loan are unchanged. The recovery rating is 3, indicating an expectation for meaningful recovery (50%-70%; rounded estimate: 60%) in the event of default.

S&P said it does not rate the $87.5 million second-lien term loan.

The agency simultaneously withdrew the B- corporate credit rating on subsidiary Checkers Drive-In Restaurants Inc. as it is no longer the reporting entity under the credit agreements following private equity sponsor Oak Hill Partners' 2017 leveraged buyout.

“The rating on Checkers primarily reflects the company's relatively small presence in the intensely competitive quick-service restaurant (QSR) industry,” S&P said in a news release.

“With a systemwide restaurant count of over 850 units, we believe it lacks scale and market presence within the QSR sector, is geographically concentrated in the eastern U.S., and has limited product offerings.”

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