S&P rates Hispanic Food, loans B

S&P said it assigned B ratings to Hispanic Food Holdings LLC and its planned $510 million of first-lien secured debt comprised of a $435 million term loan maturing in seven years and a $75 million revolving credit facility, undrawn at close, maturing in five years. The outlook is stable.

Tony’s Fresh Market and Cardenas Market are combining their operations under Hispanic Foods.

“We expect the combined business under the same leadership to exhibit better operating performance and EBITDA growth supported by good cash flow generation. We expect Hispanic Food to generate operating cash flow of $130 million-$160 million annually, most of which we think it will reinvest in the business, at least in the next 12-24 months,” the agency said in a press release.

S&P said it also forecasts the company will deliver modest free operating cash flow of about $85 million-$120 million annually and S&P Global Ratings-adjusted leverage in the low-4x area in 2022, declining to the high-3x area in 2023 and mid-3x area in 2024.

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