S&P rates Miller's Ale House loans B-

S&P said it assigned its B- corporate credit rating to Miller's Ale House Inc. The outlook is stable.

At the same time, the agency assigned its B- issue-level rating and 3 recovery rating to the company's proposed senior secured debt, consisting of a $35 million cash flow revolver due 2023 and a $250 million term loan due 2025. The 3 recovery rating indicates an expectation for meaningful (50%-70%, rounded estimate: 55%) recovery in the event of a payment default.

“The ratings on Miller's reflect its relatively small operating scale and market position in the intensely competitive casual dining segment, significant concentration in Florida, exposure to fluctuations in commodity prices, rising labor costs, and an aggressive financial policy,” S&P said in a news release.

“Partly offsetting these factors are the company's consistent track record of modestly positive same-store sales growth, high average unit volume (AUV) relative to casual dining peers, and the breadth of its menu offering that allows for a relatively diverse exposure to commodity costs.”

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