Moody's assigns Wheel Bidco, notes B2

Moody's Investors Service said it gave a B2 corporate family rating and B2-PD probability of default rating to Wheel Bidco Ltd. (PizzaExpress), the parent company for the PizzaExpress group. Concurrently, Moody's assigned company's new £335 million of backed senior secured notes a B2 rating and a Ba2 rating to the company's £30 million super senior secured revolving credit facility both due 2026. The outlook is stable.

“With lockdown restrictions on its U.K. estate set to be fully lifted in the weeks ahead PizzaExpress is now refinancing the capital structure put in place at the time of the restructuring last year. The reduction in funded debt at that time was material while the restaurant closures and rent reductions agreed in the concurrent Company Voluntary Arrangement (CVA) resulted in an improved quality of earnings from the remaining estate,” Moody’s said in a press release.

The agency projects that after the refinancing pro forma leverage, measured as Moody's-adjusted debt to EBITDA, is about 4.9x based on 2019 results, adjusted for restaurant closures in the CVA. Moody’s said it considers that this adequately places PizzaExpress in the B2 category on the basis that over the next 12 months the company can return to pre-pandemic EBITDA levels.

The outlook is stable.

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