U.S. online food ordering and delivery marketplace provider Grubhub Inc.'s wholly-owned subsidiary, Grubhub Holdings Inc., is issuing $400 million in senior unsecured notes due 2027 to refinance $340 million of existing debt and fund about $60 million of cash to the balance sheet. We are assigning our 'BB' issuer credit rating to Grubhub and our 'BB' issue-level and '3' recovery rating to the company's senior unsecured notes. The '3' recovery rating reflects our expectation of meaningful (50%-70%; rounded estimate: 65%) recovery prospects in the event of a payment default. The stable outlook reflects our expectation that Grubhub will maintain adjusted gross leverage in the 2x-3x range over the next 12 to 24 months as it executes on its growth initiatives
