IRB Holding Corp.'s Proposed $1.75 Billion First-Lien Term Loan Rated 'B+'

NEW YORK (S&P Global Ratings) Feb. 3, 2023--S&P Global Ratings today assigned its 'B+' issue-level rating to IRB Holding Corp's proposed $1.75 billion first-lien term loan. We expect the company will use the proceeds from this, combined with new and amended, restated and upsized VFN drawings, to refinance its outstanding $2.5 billion first-lien term loan (TLB-1) and for other general corporate purposes and expenses. In connection with the transaction, IRB has extended the maturity of its existing $490 million revolving credit facility from 2025 to September 2027. The recovery rating on the proposed term loan is '3', indicating our expectation of a meaningful recovery (50%-70%; rounded estimate: 55%) in a default scenario. The issue-level and recovery ratings on the company's

...- Our recovery analysis for the company simulates a default scenario occurring in 2027 due to a steep decline in revenue and income stemming from a broad slowdown in economic activity. - We assume IRB would reorganize as a going concern in a distressed scenario to maximize its lenders' recovery prospects. - Accordingly, we use an enterprise valuation (EV) approach to assess recovery prospects and have applied a 6x multiple to our assumed emergence-level EBITDA, which is in line with the multiples we use for highly franchised restaurant peers, such as Restaurant Brands...

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