Moody's assigns Aspire Bakeries loan B2

Moody's Investors Service said it assigned a B2 rating to Aspire Bakeries Holdings, LLC's planned first-lien senior secured debt that includes a $140 million revolving credit facility due in 2028 and a $425 million term loan due 2030.

Aspire's B2 corporate family rating, B2-PD probability of default rating and stable outlook are not affected, the agency said. Moody's will withdraw the B1 ratings on the first-lien senior secured debt and the Caa1 rating on the second-lien senior secured debt after the refinancing transaction closes.

The term loan will be used to repay the outstanding $287 million balance on the first-lien senior secured term loan due 2028 and the $121 million balance on the second-lien senior secured term loan, pay fees related to the transaction, and add $2 million of cash to the balance sheet.

“The refinancing transaction will increase Moody's adjusted debt/EBITDA leverage slightly to 3.4x for the last 12-month period ended October 28, 2023, from 3.3x. Moody's views the refinancing as credit positive because it will extend the debt maturity profile and free cash flow should improve going forward by $5 million-$10 million annually as the company takes out the higher interest-bearing debt. Liquidity will also be bolstered because the company is upsizing the revolving credit facility to $140 million, compared to $100 million under the existing credit agreement, the agency said in a press release.

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