Research Update: CHG PPC Intermediate II LLC 'B' Rating Affirmed; Outlook Stable; €175 Million Secured Financing Rated 'B' (Recovery: 3)

U.S.-based CHG PPC Parent LLC is issuing a €175 million ($200 million) first-lien term loan B to fund its acquisition of Mid South Baking Co. (Mid South) and repay revolver borrowings. We expect the acquisition to close in April 2019. We estimate that pro forma leverage for the transaction will be approximately 6x, which is within our expectations for the current rating. We affirmed all ratings, including our 'B' issuer credit rating on CHG PPC Intermediate II LLC and subsidiary CHG PPC Parent LLC. At the same time, we assigned our 'B' issue-level rating and '3' recovery rating to the company's proposed €175 million first-lien term loan B due 2025. The stable outlook reflects our expectation for leverage to be

...+ U.S.-based CHG PPC Parent LLC is issuing a 175 million ($200 million) first-lien term loan B to fund its acquisition of Mid South Baking Co. (Mid South) and repay revolver borrowings. We expect the acquisition to close in April 2019. + We estimate that pro forma leverage for the transaction will be approximately 6x, which is within our expectations for the current rating. + We affirmed all ratings, including our 'B' issuer credit rating on CHG PPC Intermediate II LLC and subsidiary CHG PPC Parent LLC. + At the same time, we assigned our 'B' issue-level rating and '3' recovery rating to the company's proposed 175 million first-lien term loan B due 2025. + The stable outlook reflects our expectation for leverage to be managed near 6x over the next 12-18 months given our expectation for modest debt repayment from positive free cash flow generation and EBITDA growth to largely offset continued tuck-in debt-financed acquisitions....

Research Update