S&P gives Empire Today, loan B

S&P said it assigned B ratings to Empire Today LLC and its planned $410 million first-lien term loan due 2028, which it will use to refinance debt and fund a dividend to its shareholders. The loans’ recovery rating is 3.

“Empire is a relatively small player in the flooring industry relative to larger peers such as Floor & Décor, Home Depot, and Lowe's, and we consider the competitive pressures stemming from these larger peers as a risk to its business,” the agency said in a press release.

S&P said it sees Empire's S&P Global Ratings-adjusted leverage in the low-5x area in 2021 before declining to the high-4x area in 2022.

The outlook is stable, mirroring an expectation it will increase its revenue over the next year and expand its EBITDA by improving its margin, the agency said.

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