Research Update: Chobani Global Holdings LLC's Proposed Senior Notes Rated 'CCC+'; Ratings Affirmed; Outlook Stable

Greek yogurt producer Chobani Global Holdings LLC is proposing a $500 million issuance of senior pay-in-kind (PIK) toggle notes due in 2029. The company plans to use the proceeds from this issuance and cash from its balance sheet to partially redeem the preferred equity held by Healthcare of Ontario Pension Plan (HOOPP). We view this transaction as generally leverage neutral because S&P Global Ratings treats the HOOPP preferred equity as debt. Therefore, we affirmed our 'B' issuer credit rating on Chobani. We assigned a 'CCC+' issue-level rating to the proposed senior PIK toggle notes. The recovery rating is '6' indicating our expectation for negligible recovery (0%-10%, rounded estimates 0%) in the event of a simulated default. We view the notes

...- Greek yogurt producer Chobani Global Holdings LLC is proposing a $500 million issuance of senior pay-in-kind (PIK) toggle notes due in 2029. The company plans to use the proceeds from this issuance and cash from its balance sheet to partially redeem the preferred equity held by Healthcare of Ontario Pension Plan (HOOPP). We view this transaction as generally leverage neutral because S&P Global Ratings treats the HOOPP preferred equity as debt. - Therefore, we affirmed our 'B' issuer credit rating on Chobani. - We assigned a '###+' issue-level rating to the proposed senior PIK toggle notes. The recovery rating is '6' indicating our expectation for negligible recovery (0%-10%, rounded estimates 0%) in the event of a simulated default. We view the notes as structurally subordinated to all debt issued at Chobani LLC. - We raised our issue-level rating on Chobani's senior secured debt to 'B+' from 'B' reflecting our increased valuation of Chobani as a result of EBITDA expansion. The recovery...

Research Update