Research Update: Quick Service Restaurateur Elvis UK Holdco, Parent Of Restaurant Brands Iberia, Assigned 'B' Rating; Outlook Stable

Elvis UK Holdco Ltd., parent of Restaurant Brands Iberia (RBI), issued €538 million of senior secured notes and a €150 million senior revolving credit facility (RCF). Coupled with about a €690 million equity injection mainly of preference shares, the proceeds have allowed the new majority shareholder, financial sponsor Cinven, to acquire a 71% stake in RBI from its previous owners. Although the group exhibits strong operating performance, we believe that the acceleration of its expansion plan--both through acquisitions and greenfield openings--will weigh on the group's credit metrics and cash flow for at least the next two years. We therefore assigned our 'B' long-term issuer credit rating to Elvis UK Holdco and our 'B' issue-level rating and '3' recovery rating to

...- Elvis UK Holdco Ltd., parent of Restaurant Brands Iberia (RBI), issued 538 million of senior secured notes and a 150 million senior revolving credit facility (RCF). - Coupled with about a 690 million equity injection mainly of preference shares, the proceeds have allowed the new majority shareholder, financial sponsor Cinven, to acquire a 71% stake in RBI from its previous owners. - Although the group exhibits strong operating performance, we believe that the acceleration of its expansion plan--both through acquisitions and greenfield openings--will weigh on the group's credit metrics and cash flow for at least the next two years. - We therefore assigned our 'B' long-term issuer credit rating to Elvis UK Holdco and our 'B' issue-level rating and '3' recovery rating to the group's proposed 688 million of first-lien debt. - The stable outlook reflects that, despite operating performance leading to S&P Global Ratings-adjusted leverage trending below 4.5x in 2023, the company will not generate...

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