Moody's raises Bowlero, rates loan B1

Moody's Investors Service said it upgraded Bowlero Corp.'s ratings including its corporate family rating to B1 from B2 and the probability of default rating to B1-PD from B2-PD. The agency also upgraded to B1 from B2 the rating on the senior secured revolver issued by Bowlero's subsidiary, Kingpin Intermediate Holdings, LLC. Concurrently, Moody's assigned a B1 rating to the new first-lien senior secured term loan B issued by Kingpin. Bowlero's SGL-2 speculative grade liquidity rating is unchanged.

Bowlero plans to upsize the revolver due December 2026 to $200 million from $165 million and involves the newly amended $900 million first-lien term loan B due February 2028. The new term loan proceeds will be used primarily to repay Bowlero's first-lien term loan and the balance on the revolver. The B2 rating on the term loan due 2024 will be withdrawn after repayment.

“The upgrade of the CFR to B1 reflects the extension of Bowlero's debt maturity profile as well as Moody's expectation for continued good operating performance and leverage reduction over the next 12 to 18 months. Bowlero's debt-to-EBITDA leverage has declined rapidly over the last year to about 4.8x (pro forma for the transaction and including Moody's standard adjustments) as of the first quarter of the June 2023 fiscal year due to a strong recovery in operating performance from the pandemic,” Moody’s said in a press release.

The outlook is stable.

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