Research Update: The Chefs' Warehouse Inc. 'B-' Rating Affirmed, Removed From CreditWatch; Outlook Negative; New Debt Rated

U.S.-based The Chefs' Warehouse Inc. intends to amend and extend by three years its first-lien term loan due in June 2022. As part of the transaction, the company will also repay 15% of the principal owed to those lenders that participate in the extension ($238 million outstanding balance). Chefs' has also fortified its liquidity position after raising $86 million of equity. We expect its meaningful cash balances will enable it to withstand significant industry headwinds and severe profit deterioration in coming quarters caused by the COVID-19 pandemic. We are affirming our 'B-' issuer credit rating on Chefs' and removing it from CreditWatch, where we placed it with negative implications on March 20, 2020. We are assigning our 'B' issue-level rating

...- U.S.-based The Chefs' Warehouse Inc. intends to amend and extend by three years its first-lien term loan due in June 2022. As part of the transaction, the company will also repay 15% of the principal owed to those lenders that participate in the extension ($238 million outstanding balance). - Chefs' has also fortified its liquidity position after raising $86 million of equity. We expect its meaningful cash balances will enable it to withstand significant industry headwinds and severe profit deterioration in coming quarters caused by the COVID-19 pandemic. - We are affirming our 'B-' issuer credit rating on Chefs' and removing it from CreditWatch, where we placed it with negative implications on March 20, 2020. - We are assigning our 'B' issue-level rating to the company's extended term loan. The recovery rating is '2'. - We are also raising our issue-level rating on the company's existing first-lien term loan to 'B' from 'B-', and removing it from CreditWatch. We will withdraw our rating...

Research Update