Research Update: CHG PPC Intermediate II LLC And Parent Assigned 'B' Ratings; Outlook Stable

U.S. private-investment firm PPC Partners is acquiring CHG PPC Intermediate II LLC, a family-owned producer of grain-based, frozen, and seasoning products, for approximately $1.4 billion. We expect the acquisition to close at the end of March 2018. The transaction is being funded with a proposed new $655 million first-lien term loan, $135 million second-lien term loan, and $580 million of equity. Pro forma fiscal year ended April 2018 adjusted leverage is about 6x. We are assigning a 'B' corporate credit rating to CHG PPC Intermediate II LLC and the borrower, CHG PPC Parent LLC. We are assigning a 'B' issue-level rating and '3' recovery rating to the proposed $655 million senior secured first-lien term loan maturing 2025 and $125 million

...+ U.S. private-investment firm PPC Partners is acquiring CHG PPC Intermediate II LLC, a family-owned producer of grain-based, frozen, and seasoning products, for approximately $1.4 billion. We expect the acquisition to close at the end of March 2018. + The transaction is being funded with a proposed new $655 million first-lien term loan, $135 million second-lien term loan, and $580 million of equity. Pro forma fiscal year ended April 2018 adjusted leverage is about 6x. + We are assigning a 'B' corporate credit rating to CHG PPC Intermediate II LLC and the borrower, CHG PPC Parent LLC. + We are assigning a 'B' issue-level rating and '3' recovery rating to the proposed $655 million senior secured first-lien term loan maturing 2025 and $125 million revolving credit facility maturing in 2023 that will be undrawn at close. The second-lien term loan is not rated. + The stable outlook reflects our expectation that the company will maintain leverage in a range between 5x and 6x as it executes on...

Research Update