Research Update: Hispanic Food Holdings LLC Assigned 'B' Rating, Outlook Stable; New Secured Debt Rated 'B'

Hispanic-focused specialty food retailers, Tony's Fresh Market and Cardenas Markets, are combining their operations under parent Hispanic Food Holdings LLC. To fund the transaction, Hispanic Food plans to issue $510 million of first-lien secured debt comprised of a $435 million term loan maturing in seven years and a $75 million revolving credit facility (undrawn at close) maturing in five years. S&P Global Ratings assigned its 'B' issuer credit rating to Hispanic Food Holdings. At the same time, we assigned our 'B' issue-level and '3' recovery ratings to the proposed debt facilities. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default. The stable outlook reflects our view that the

...- Hispanic-focused specialty food retailers, Tony's Fresh Market and Cardenas Markets, are combining their operations under parent Hispanic Food Holdings LLC. - To fund the transaction, Hispanic Food plans to issue $510 million of first-lien secured debt comprised of a $435 million term loan maturing in seven years and a $75 million revolving credit facility (undrawn at close) maturing in five years. - S&P Global Ratings assigned its 'B' issuer credit rating to Hispanic Food Holdings. - At the same time, we assigned our 'B' issue-level and '3' recovery ratings to the proposed debt facilities. The '3' recovery rating indicates our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default. - The stable outlook reflects our view that the combined company will maintain adequate liquidity as it invests in operational improvements and its ability to pass on cost increases to consumers will protect margins in the current inflationary environment. Our...

Research Update