Fitch assigns GPS Hospitality B-

Fitch Ratings said it assigned a first-time expected B- long-term issuer default rating to GPS Hospitality Holding Co. LLC. The agency also gave expected BB-/RR1 ratings to GPS' planned $50 million super-senior revolving credit facility and expected B-/RR4 ratings to its planned $385 million of senior secured notes which will be co-borrowed by GPS Finco Inc.

“Fitch's rating assumes the company's proposed offering described above to refinance its existing capital structure is executed largely as planned. The rating considers the company's status as a leading U.S. franchisee of Burger King, the second largest quick-serve restaurant (QSR) burger company in the U.S. and the world, as well as Fitch's expectation of high leverage with adjusted debt/EBITDAR of around 7x following the proposed refinancing, the company's small scale with EBITDA around $60 million and the risks inherent with the company's acquisition strategy,” the agency said in a press release.

GPS will use the notes’ proceeds for refinancing debt. The revolver is expected to be undrawn at close.

The outlook is stable.

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