S&P rates Wells Enterprises loan BB

S&P said it assigned its BB issue-level rating to Wells Enterprises Inc. subsidiary WEI Sales LLC's proposed $175 million first-lien term loan maturing in 2025.

The recovery rating of 2 indicates expectations for a substantial (70%-90%; rounded estimate 75%) recovery in the event of payment default.

“Our view of Wells' business continues to reflect its narrow product focus in the slow-growing packaged and novelty ice cream category, geographic and manufacturing concentration, and small scale relative to larger diversified competitors,” the agency said in a news release.

“Despite its product concentrations, the company's strategy is to further expand market share within ice cream, possibly with M&A, while at the same time investing to improve manufacturing execution and grow margins.”

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