Research Update: Aramark 'BB-' Rating Affirmed As Pandemic Restrictions Ease; Outlook Stable

S&P Global Ratings believes pandemic restrictions are being eased across the U.S. economy as more states reopen amid increased distribution of vaccines and fewer COVID-19 cases. We expect U.S.-based Aramark's credit metrics--very weak due to lockdown-induced demand constraints--to materially improve beginning this spring and approach pre-COVID-19 levels by Sept. 30, 2022. We believe Aramark's strong liquidity will enable it to fully participate in the reopening. We affirmed our 'BB-' issuer credit rating on the food, facilities, and uniform services provider. Our issue-level ratings are not affected. The stable outlook reflects our expectation that demand for Aramark's services will begin to recovery this spring, meaningfully improving profit and credit metrics. We expect adjusted leverage as of Sept. 30, 2021, to fall

...- S&P Global Ratings believes pandemic restrictions are being eased across the U.S. economy as more states reopen amid increased distribution of vaccines and fewer COVID-19 cases. - We expect U.S.-based Aramark's credit metrics--very weak due to lockdown-induced demand constraints--to materially improve beginning this spring and approach pre-COVID-19 levels by Sept. 30, 2022. We believe Aramark's strong liquidity will enable it to fully participate in the reopening. - We affirmed our '##-' issuer credit rating on the food, facilities, and uniform services provider. Our issue-level ratings are not affected. - The stable outlook reflects our expectation that demand for Aramark's services will begin to recovery this spring, meaningfully improving profit and credit metrics. We expect adjusted leverage as of Sept. 30, 2021, to fall below 9x (including around 7.5x annualized leverage in the second half) with further improvement to about 5x by Sept. 30, 2022....

Research Update