S&P upgrades H-Food

S&P said it raised the rating on H-Food Holdings LLC's senior secured first-lien debt by one notch to B from B-.

The agency also said it revised the recovery rating on the debt to 2 from 3.

The 2 recovery rating indicates 70% to 90% expected default recovery.

The upgrade was due to the company's senior secured first-lien debt balances, which are lower than previously anticipated, leading to improved recovery prospects.

The company's debt capital structure consists of a $225 million revolving credit facility due in 2023, $1.14 billion first-lien term loan due 2025, $515 million incremental first-lien term loan due 2025, $300 million second-lien term loan due 2026 and $350 million of 8½% senior notes due 2026.

The issuer of the revolver and term-loan is H-Food Holdings.

Hearthside Bidco BV is a co-borrower on the term loan, which supports the company's international operations, S&P said.

The guarantors of the facility are H-Food Holdings and all of its direct and indirect wholly owned material domestic and Dutch subsidiaries, the agency said.

The facility is secured by a first-priority lien on substantially all of the assets and stock of the borrowers and H-Food Holdings' domestic subsidiaries and Dutch subsidiaries, S&P said.

The second-lien term loan is secured on a secondary basis to the collateral mentioned above.

The notes are senior unsecured obligations and subordinated to the senior secured credit facilities, the agency said.

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