Franchise Group Inc. (FRG) is issuing new debt to fund the acquisition of Badcock Home Furniture. We affirmed our existing ratings on FRG, including our 'B+' issuer credit rating, given our view of FRG's improved business prospects following the acquisition, offset with higher pro forma leverage. At the same time, we assigned our 'BB-' issue-level and '2' recovery ratings to the new $425 million first-lien term loan. The stable outlook reflects our expectation for the Badcock acquisition to strengthen FRG's revenue base and profit generation, leading to improved cash flow generation. The stable outlook reflects our expectation for the Badcock acquisition to strengthen revenue growth and profit generation, leading to improved cash flow generation. We could lower the rating if
