Research Update: France-Based Fresh Food Retailer ZF Invest Outlook Revised To Positive On Solid Operating Performance; Affirmed At 'B-'

ZF Invest plans to issue an add-on to its term loan B (TLB) of up to €250 million to repay €70 million of drawings on its revolving credit facility (RCF), finance transaction fees, and build up the cash on its balance sheet, while increasing the RCF limit by €20 million to €270 million. The proposed add-on follows ZF Invest's solid operating performance in fiscal year ended Sept. 30, 2023 (fiscal 2023) amid tough market conditions, with revenue up 21.7%, S&P Global Ratings-adjusted EBITDA at €252 million versus €171 million in fiscal 2022, and positive cash generation; consequently, we project leverage to decrease to about 7.5x in fiscal 2024 and 6.5x in fiscal 2025 (including shareholder loans), despite incremental debt. As

...- ZF Invest plans to issue an add-on to its term loan B (TLB) of up to 250 million to repay 70 million of drawings on its revolving credit facility (RCF), finance transaction fees, and build up the cash on its balance sheet, while increasing the RCF limit by 20 million to 270 million. - The proposed add-on follows ZF Invest's solid operating performance in fiscal year ended Sept. 30, 2023 (fiscal 2023) amid tough market conditions, with revenue up 21.7%, S&P Global Ratings-adjusted EBITDA at 252 million versus 171 million in fiscal 2022, and positive cash generation; consequently, we project leverage to decrease to about 7.5x in fiscal 2024 and 6.5x in fiscal 2025 (including shareholder loans), despite incremental debt. - As a result, we revised our outlook on ZF Invest to positive from stable and affirmed our 'B-' ratings on the company and its first-lien TLB due 2028, expected to increase to 1.632 billion after the transaction. We are also assigning a 'B-' issue rating to the 250 million...

Research Update