S&P lifts Chefs, rates loan B+

S&P said it raised its rating on the Chefs’ Warehouse Inc. to B from B- and assigned a B+ rating to its planned upsized and extended $250 million term loan due 2029. The loan’s recovery rating is 2 (70%-90% recovery; rounded estimate: 85%).

“The upgrade reflects Chefs' ongoing recovery and return to historical profitability levels, which we believe it will sustain. Chefs' top-line growth and credit measures have significantly improved this year as demand has recovered over the past year with pandemic restrictions and fears abating. In the second quarter, trends were solid with 36% reported organic revenue growth supplemented by the company's ongoing tuck-in acquisition strategy that added another 17% year-on-year revenue growth,” the agency said in a press release.

S&P said it sees Chefs maintaining mid- to high- single-digit EBITDA margin levels.

The outlook is positive.

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