Bulletin: The Chefs' Warehouse Inc. Convertible Notes Will Moderately Raise Leverage

CHICAGO (S&P Global Ratings) Nov. 19, 2019--S&P Global Ratings today said that The Chefs' Warehouse Inc.'s planned issuance of $130 million of convertible notes will moderately increase leverage but not affect the ratings. The company intends to use the proceeds to repay $43 million in outstanding borrowings under its asset-based lending (ABL) revolver and for general corporate purposes. It could issue up to $20 million in incremental convertible notes, at the option of the initial purchasers. We estimate leverage of about 4.6x, pro forma for the issuance and ABL paydown (or about 4.8x, assuming the upsize to $150 million), versus about 3.9x as of Sept. 30, 2019. We estimate The Chefs' Warehouse will have over $100 million cash after the

...November 19, 2019 CHICAGO (S&P Global Ratings) Nov. 19, 2019--S&P Global Ratings today said that The Chefs' Warehouse Inc.'s planned issuance of $130 million of convertible notes will moderately increase leverage but not affect the ratings. The company intends to use the proceeds to repay $43 million in outstanding borrowings under its asset-based lending (ABL) revolver and for general corporate purposes. It could issue up to $20 million in incremental convertible notes, at the option of the initial purchasers. We estimate leverage of about 4.6x, pro forma for the issuance and ABL paydown (or about 4.8x, assuming the upsize to $150 million), versus about 3.9x as of Sept. 30, 2019. We estimate The Chefs' Warehouse will have over $100 million cash after the issuance, most of which will be earmarked for acquisitions. The company has significant room for growth in underpenetrated regions and, in our view, will maintain a heavy pace of investment to build scale and infrastructure in these markets,...

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