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By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

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2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

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Related Issuers
Rating Action:

Moody's assigns B2 rating to Chefs' Warehouse proposed amended term loan

29 May 2020

New York, May 29, 2020 -- Moody's Investors Service (Moody's) assigned a B2 rating to The Chefs' Warehouse, Inc.'s (Chefs) proposed amended first lien term loan due 2025. The company's existing ratings are unchanged, including its B2 corporate family rating (CFR), B2-PD probability of default rating, B2 term loan rating and SGL-3 speculative grade liquidity rating. The ratings outlook remains negative.

The amendment will extend the maturity of the $238 million (outstanding amount) term loan to 2025 from 2022, increase pricing by 200bp and add a minimum liquidity covenant. In conjunction with the transaction, the company will pay down 15% of the outstanding amount (payable to consenting lenders only).

Moody's views the transaction as credit positive because it extends the company's debt maturity profile and modestly lowers debt levels. Moody's expects the company to have adequate liquidity over the next 12-18 months, with a $227 million pro-forma cash balance and $80 million borrowings under the $150 million asset-based revolving credit facility.

Moody's took the following rating actions for The Chefs' Warehouse, Inc.:

Proposed Senior Secured Bank Credit Facility, assigned B2 (LGD4)

RATINGS RATIONALE

The Chefs' Warehouse, Inc.'s B2 corporate family rating incorporates Moody's expectations that the company will have adequate liquidity over the next 12-18 months. The rating also reflects Chefs' position as a premier distributor of specialty food products in the United States and Canada. The company benefits from serving customers a product portfolio with a deep selection of specialty and center-of-the-plate food products that differentiates its offering from the larger, traditional broadline foodservice distributors. Chefs has been able to command solid operating margins relative to its peers. Nonetheless, its scale remains modest as revenue and EBITDA are much smaller than that of its public company foodservice industry peers. A key credit constraint is the expectation that Chefs' customer base will shrink as a result of the temporary restaurant closures and lower volumes once restaurants reopen. Chefs' niche focus is on independent restaurant operators that have riskier credit profiles and liquidity, providing them with less ability to withstand their closure in response to COVID-19. Acquisitions have historically been integral to the company's growth. The rating also incorporates governance considerations, specifically the company's balanced financial policies.

The negative outlook reflects Moody's view that Chefs' operating performance and credit metrics will remain under considerable pressure given its exposure to independent restaurants, which are expected to be hurt by the disruption of COVID-19 and the ensuing weakness in consumer demand.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Factors that could result in an upgrade include an ability to increase its scale while maintaining debt to EBITDA around 4.5 times and EBITA to interest above 2.25 times on a sustained basis. An upgrade would also require Chefs' maintaining at least good liquidity.

Factors that could result in a downgrade include leverage on a debt to EBITDA basis of around 5.5 times or EBITA coverage of interest below 1.75 times on a sustained basis. A deterioration in liquidity for any reason could also result in a downgrade. The ratings could also be negatively impacted in the event Chefs' financial strategy towards acquisitions or shareholder returns became more aggressive.

The Chefs' Warehouse, Inc. distributes specialty food products to menu-driven independent restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools, bakeries, patisseries, chocolatiers, cruise lines, casinos, and specialty food stores in the United States and Canada. The company generated net sales of $1.6 billion for the twelve months ended March 27, 2020.

The principal methodology used in this rating was Distribution & Supply Chain Services Industry published in June 2018 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1121974. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

The rating has been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

This rating is solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.

At least one ESG consideration was material to the credit rating action(s) announced and described above.

The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Raya Sokolyanska
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Margaret Taylor
Associate Managing Director
Corporate Finance Group
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

No Related Data.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

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MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​
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