Tacala LLC 'B-' Rating Affirmed, Outlook Revised To Stable On Good Performance And Proposed Dividend Recapitalization

Taco Bell franchisee Tacala LLC has reported improving sales and profitability in the recent quarter and plans to issue incremental debt to fund a special dividend to shareholders. We are affirming our 'B-' issuer credit rating on Tacala and revising our outlook to stable from negative. At the same time, we are affirming our 'B-' issue-level rating on the company's upsized first-lien credit facility and 'CCC' rating on its upsized second-lien term loan. The '3' and '6' recovery ratings, respectively, are unchanged. The stable outlook reflects our view that meaningful threats posed by the pandemic to Tacala's sales and to its supply chain have subsided. We expect modest revenue growth over the next 12 months and a slight contraction in

...November 6, 2020 - Taco Bell franchisee Tacala LLC has reported improving sales and profitability in the recent quarter and plans to issue incremental debt to fund a special dividend to shareholders. - We are affirming our 'B-' issuer credit rating on Tacala and revising our outlook to stable from negative. - At the same time, we are affirming our 'B-' issue-level rating on the company's upsized first-lien credit facility and '###' rating on its upsized second-lien term loan. The '3' and '6' recovery ratings, respectively, are unchanged. - The stable outlook reflects our view that meaningful threats posed by the pandemic to Tacala's sales and to its supply chain have subsided. We expect modest revenue growth over the next 12 months and a slight contraction in profit margins as the company begins to reopen its dining rooms. NEW YORK (S&P Global Ratings) Nov. 6, 2020--S&P Global Ratings today took the rating actions listed above. Tacala has demonstrated a resilient business model during the...

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