S&P raises Chefs’ Warehouse

S&P said it raised Chefs’ Warehouse Inc.’s issuer rating to B+ from B and its senior secured term loan rating to BB- from B+. The 2 recovery rating indicates substantial (70%-90%; rounded estimate: 80%) recovery in default.

“The upgrade reflects Chefs' improving credit metrics and financial policy, which now includes a formal leverage target. The company reduced its S&P Global Ratings-adjusted leverage to 4.6x as of the third quarter of 2023, from 4.8x as of the end of fiscal year 2022, as organic growth and the contributions from its acquired businesses offset its slightly higher debt balances.

“During the most recent quarter, Chefs' prepaid $20 million of its first-lien term loan, leaving it with about $277 million outstanding. The company recently announced it plans to reduce its leverage to the 2.5x-3x range by the end of 2025 from 3.6x today,” S&P said in a press release.

The outlook is stable.

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