S&P: Bowlmor AMF Corp. 'B' Rating Affirmed On Announced Refinancing And Share Buyback; Outlook Stable; New Debt Rated
At the same time, we assigned our 'B+' issue-level rating and '2' recovery rating to the company's subsidiary AMF Bowling Centers Inc.'s proposed $470 million first-lien term loan and $30 million revolver. The '2' recovery rating sindicates our expectation for substantial (70% to 90%; lower end of the range) recovery for lenders in the event of a payment default. We also assigned our 'CCC+' issue-level rating and '6' recovery rating to the subsidiary's $130 million second-lien term loan. The '6' recovery rating indicates our expectation for negligible (0% to 10%) recovery for lenders in the event of a payment default.
Bowlmor plans to use the proceeds from the $470 million first-lien term loan and $130 million second-lien term loan to repay its existing term loan balances, to offer to acquire approximately $175 million of shares from all shareholders on a pro-rata basis (excluding CEO Tom Shannon), to pay transaction fees and expenses, and to add a modest amount of cash to the balance sheet.
"The rating affirmation reflects Bowlmor's ability to absorb the additional leverage without meaningfully impairing its financial risk profile as well as continued positive trends in EBITDA and margin performance related to the successful completion of center conversions to a more contemporary look and offerings," said S&P Global Ratings credit analyst Justin Gerstley.
The stable outlook reflects our expectation for the company to continue to generate levels of cash flow sufficient to meet its capital requirements and maintain total EBITDA coverage of interest expense above 1.5x. We expect the company to improve lease-adjusted leverage to the mid-6x area by the end of fiscal 2017.
Комментарии