Getlowfees.com

  • Domino's Inc. ratings placed on CreditWatch negative after debt refinancing

NEW YORK -- Standard & Poor's Ratings Services placed its "BB-" corporate credit and senior secured bank loan ratings, and its "B" subordinated debt rating of Ann Arbor, Mich.-based pizza delivery company Domino's Inc., on CreditWatch with negative implications.

"The CreditWatch placement is based on the company's announcement of a refinancing comprised of a $685 million bank loan and $450 million senior subordinated notes offering. The proceeds will be used to refinance the company's existing debt, redeem $199.5 million of its preferred shares, and pay a $200 million common dividend, which will add about $400 million of incremental debt," said Standard & Poor's credit analyst Robert Lichtenstein, in a news release.

As a result of the refinancing, pro forma lease-adjusted total debt to earnings before interest, taxes, depreciation and amortization (EBITDA) will increase to about six times, compared with 3.7 times under the previous capital structure. Moreover, the release warned, "financial flexibility will be reduced as interest payments and amortizations will have substantially increased."

The ratings reflect the company's participation in the highly competitive pizza industry, its narrow product focus and a significant debt burden, the release said. Those factors are partially mitigated by the company's established brand identity, simple and cost-efficient operating system, and improved profitability. The release said that Domino's liquidity is adequate, helped by a $125 million revolving credit facility, which is expected to be undrawn at closing.

Related Content

User Comments – Give us your opinion!
Products & Services

Mobile Ordering

http://global.networldalliance.com/new/images/products/5933.png

5933/Mobile-Ordering

Quote decoder: how to compare restaurant POS systems

http://global.networldalliance.com/new/images/products/1290.png

1290/Quote-decoder-how-to-compare-restaurant-POS-systems

Chicken

http://global.networldalliance.com/new/images/products/6793.png

6793/Chicken

Restaurant Digital Signage Advertising Network

http://global.networldalliance.com/new/images/products/6691.png

6691/Restaurant-Digital-Signage-Advertising-Network

Enterprise Solutions

http://global.networldalliance.com/new/images/products/4124.png

4124/Enterprise-Solutions

Nationwide Criminal Records

http://global.networldalliance.com/new/images/products/Criminal_Search_iix.gif

1427/Nationwide-Criminal-Records

DriverAdvisor Fleet Monitoring

http://global.networldalliance.com/new/images/products/DriverAdvisor_iix.gif

1425/DriverAdvisor-Fleet-Monitoring

Quad Core Menu Board Media Player - $199

http://global.networldalliance.com/new/images/products/6679.png

6679/Quad-Core-Menu-Board-Media-Player-199

Mexican-Style Meats

http://global.networldalliance.com/new/images/products/6795.png

6795/Mexican-Style-Meats

Standard coffee

http://global.networldalliance.com/new/images/products/6963.png

6963/Standard-coffee

Digital Menu Boards and ROI
Request Information From Suppliers
Save time looking for suppliers. Complete this form to submit a Request for Information to our entire network of partners.