Research Update: Aramark Outlook Revised To Stable From Negative, Ratings Affirmed On Signs Of Recovery

U.S.-based Aramark?s operating performance has shown signs of recovery over the past two quarters amid the easing of coronavirus pandemic-related restrictions and the reopening of a large portion of its clients' businesses. Although its credit metrics are still very weak, including leverage of 7.4x for the 12 months ended Dec. 31, 2021, its performance in recent quarters points toward annualized S&P Global Ratings-adjusted leverage of about 6.0x. In addition, we expect the company will improve its leverage to about 5.5x by the end of fiscal year 2022. Therefore, we revised our outlook on Aramark to stable from negative and affirmed our 'BB-' issuer credit rating. At the same time, we affirmed our 'BB+' issue-level rating on its senior secured debt

...- U.S.-based Aramark's operating performance has shown signs of recovery over the past two quarters amid the easing of coronavirus pandemic-related restrictions and the reopening of a large portion of its clients' businesses. - Although its credit metrics are still very weak, including leverage of 7.4x for the 12 months ended Dec. 31, 2021, its performance in recent quarters points toward annualized S&P Global Ratings-adjusted leverage of about 6.0x. In addition, we expect the company will improve its leverage to about 5.5x by the end of fiscal year 2022. - Therefore, we revised our outlook on Aramark to stable from negative and affirmed our '##-' issuer credit rating. At the same time, we affirmed our '##+' issue-level rating on its senior secured debt and our 'B+' issue-level rating on its senior unsecured debt. The recovery ratings are unchanged, including our '1' recovery rating (90%-100%; rounded estimate: 95%) on the senior secured debt and our '5' recovery rating (10%-30%; rounded...

Research Update