Research Update: IRB Holding Corp. 'B' Rating Affirmed, Off CreditWatch, On Announced Financing For Sonic Acquisition; Outlook Stable

U.S.-based restaurant company IRB Holding Corp. (Inspire Brands) announced its funding plan for the $2.3 billion acquisition of Sonic Corp (Sonic), composed of a new $1.025 billion term loan add-on, approximately $720 million of existing securitization debt issued by Sonic Capital LLC as Master Issuer among other Co-Issuers, $625 million of common equity infusion, and a modest amount of cash on hand. The company also plans to upsize its revolving credit facility to $250 million as part of the transaction. We are affirming the 'B' corporate credit rating to IRB Holding Corp. with a stable outlook and removing the ratings from CreditWatch with negative implications. We are also affirming the 'B' issue-level rating with a '3' recovery rating on the

...+ U.S.-based restaurant company IRB Holding Corp. (Inspire Brands) announced its funding plan for the $2.3 billion acquisition of Sonic Corp (Sonic), composed of a new $1.025 billion term loan add-on, approximately $720 million of existing securitization debt issued by Sonic Capital LLC as Master Issuer among other Co-Issuers, $625 million of common equity infusion, and a modest amount of cash on hand. The company also plans to upsize its revolving credit facility to $250 million as part of the transaction. + We are affirming the 'B' corporate credit rating to IRB Holding Corp. with a stable outlook and removing the ratings from CreditWatch with negative implications. + We are also affirming the 'B' issue-level rating with a '3' recovery rating on the senior secured credit facility, and the '###+' issue-level rating with a '6' recovery rating to the existing $485 million senior unsecured notes. + The stable outlook reflects our expectation that IRB's very high leverage will improve meaningfully...

Research Update