JUMP REPORT

Shares of Dave & Buster’s (NASDAQ: PLAY), Bloomin’ Brands (NASDAQ: BLMN), and The Chefs’ Warehouse (NASDAQ: CHEF) all dropped roughly 10% on Monday as the broader markets reacted to a jump in coronavirus cases in the U.S. and overseas, which could signal trouble for already struggling restaurant stocks. The Chef’s Warehouse will give investors a glimpse into the industry’s recovery when it reports results for its third quarter on Wednesday. Investors will be able to compare the results to the prior quarter, when the company had just over $240 million of liquidity but also a sharp 51.3% decline in net sales.

Dave & Buster’s Entertainment Inc (NASDAQ: PLAY) won over another Wall Street analyst after the entertainment and dining chain completed a high yield bond offering.The Dave & Buster’s Analyst: Raymond James analyst Brian Vaccaro upgraded Dave & Buster’s from Outperform to Strong Buy with a price target lifted from $20 to $25.The Dave & Buster’s Thesis: Dave & Buster’s priced a $550 million senior note offering that will be used to repay an existing term loan and reduce its existing revolver, Vaccaro wrote in the note. The new offering will also lift its available liquidity to around $350 million and this will be sufficient to cover nearly two years worth of burn rates.But existing burn rates could ease moving forward as sales are likely to continue recovering despite the ongoing COVID-19 pandemic, the analyst wrote. Data from Placer.ai and Raymond James shows Dave & Buster’s weekly U.S. traffic trends were at its lowest in late May at down 88.6%.The company has seen a steady improvement since then as the most recent data for the week Oct. 11 shows traffic improved to down 55.3%.The encouraging recent trends has prompted some investors to evaluate multiple post-COVID EBITDA recovery scenarios as consumers are showing a willingness to return to the brand.PLAY Price Action: Shares of Dave & Buster’s closed Wednesday up 1.9% at $19.15.Latest Ratings for PLAY DateFirmActionFromTo Oct 2020Raymond JamesUpgradesOutperformStrong Buy Oct 2020BMO CapitalUpgradesMarket PerformOutperform Sep 2020StifelUpgradesHoldBuy View More Analyst Ratings for PLAY View the Latest Analyst RatingsSee more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * What Foot Traffic Data Is Saying About Kroger, GameStop And Dave & Busters Ahead Of Earnings(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Dave & Buster’s (PLAY) moved higher Wednesday after Raymond James upgraded the stock to Strong Buy with a $25 price target.

(Bloomberg Opinion) — In April, with the coronavirus pandemic in full swing in the U.S., Texas billionaire Tilman Fertitta had little choice but to turn to the then-frozen leveraged-loan market. He offered a staggering 16% yield to entice investors to extend a lifeline to his empire of Golden Nugget casinos and restaurants such as Bubba Gump Shrimp Co. and Rainforest Cafe. The $300 million loan ultimately priced to yield 14%, a level I called “painful but necessary.”Fast-forward six months to last Friday. That loan rallied more than any other member of the S&P/LSTA Leveraged Loan Index, according to data compiled by Bloomberg, reaching about 113 cents on the dollar for a yield of 5.8%. Now, this isn’t a groundbreaking new level. The loan surged in late June, after Fertitta announced he would merge his Golden Nugget Online Gaming Inc. with Landcadia Holdings II, a publicly traded “blank check” company he created in 2019. Part of that deal included buying back half of the April loan at 116 cents on the dollar. The prospect of expanding in web-based betting and sports wagering is intriguing when state and local governments are strapped and may turn to legalizing online gambling for revenue.Still, I thought of this deal — and the quick and huge return for investors who took the risk when uncertainty was the highest — after seeing the new offerings in the speculative-grade debt markets. It’s worth a reminder that Fertitta’s leveraged loan is still likely to prove the exception, not the norm, during this unusual economic crisis.Consider Dave & Buster’s Entertainment Inc., which faces many of the same issues as brick-and-mortar Golden Nugget casinos. Namely, are people ready to go indoors and drink among a bunch of strangers while gambling or playing arcade games? The company borrowed $550 million through five-year secured notes to get some much-needed cash and relief from lender protections:Proceeds will repay a term loan and revolving credit facility, and be used for general corporate purposes.As part of the transaction, the company is suspending certain maintenance covenants through April 2022, adding a $150 million minimum liquidity covenant and extending the maturity of its revolving credit facility by two years to 2024, according to a news release. Upon closing, the company will have about $299 million in available liquidity.The chain has faced breaching the terms of its $500 million revolving credit facility after pandemic shutdowns sent its revenue plunging. A waiver from lenders was set to expire Nov. 1, and the company has previously warned that it may need to file Chapter 11 to restructure its obligations.The bonds priced to yield 7.625%, down from initial talk in the 8% to 8.25% range. Is that enough, given the explicit bankruptcy risk? Moody’s Investors Service rates the notes Caa1, among the lowest grades outside of default, while S&P Global Ratings considers them one step better, at B-. The average yield in the Bloomberg Barclays junk-bond index is 5.28%. The portion of the benchmark rated triple-C yields 9.35%, close to the lowest level since October 2018. Then there’s Ligado Networks LLC, which priced $3.85 billion in debt with a 17.5% coupon in a last-ditch effort to avert a Chapter 11 filing. Not only is that the highest rate for a junk bond since at least 2002, but the company will pay in new debt only, in what’s called payment-in-kind financing. “This restructuring is critical to Ligado’s ability to pursue several paths to improve its credit trajectory, including the development of an organic business model targeting several existing or new end markets,” according to Moody’s. That’s hardly a guarantee the company will find a way to avert insolvency. Overall, credit markets saw several new deals this week from risky, pandemic-plagued companies like United Airlines Holdings Inc. and Sizzling Platter LLC, which operates restaurants including Dunkin’ Donuts, Little Caesars and Red Robin. These borrowers are clearly looking to lock in financing before potential volatility around the U.S. election. Investors should be wary about these shoehorned offerings.There’s no question that this has been a strange crisis. On the one hand, large companies have had no trouble selling bonds at near record-low yield levels, with 2020 investment-grade issuance currently at $1.6 trillion and high yield at $357 billion. Yet there have also been more than 200 bankruptcy filings by businesses with more than $50 million in liabilities, the most since 2009, according to data compiled by Bloomberg.While Chapter 11 cases have steadied in recent weeks after spiking during the summer, it’s an open question whether that will last as the country heads into the coldest months of the year; cases are already starting to surge in states from Vermont to Wisconsin to New Mexico. BlackRock Inc. is among those who say the scale of restructuring across the globe could exceed the previous peak that followed the 2008 financial crisis. “One big reason is the significant growth in sub-investment grade debt,” the BlackRock Investment Institute said in a note this week.The Federal Reserve’s unprecedented foray into credit markets has staved off a worst-case scenario. But that’s not the same as saying vulnerable companies are out of the woods. Dave & Buster’s shares jumped 7.4% on Monday and 8.2% on Tuesday, reaching $18.79, up from as low as $4.61 in mid-March. Some analysts say the new bonds “remove our primary concern and a key overhang.” While liquidity is important, to focus entirely on that seems shortsighted. Philip Brendel, a distressed credit analyst with Bloomberg Intelligence, has a more sobering view of indoor entertainment venues. “Barring Herculean turnarounds, they may just be Chapter 11 filers in ’21 or ’22,” he said. With high-yield spreads back near pre-pandemic levels, investors would be wise to tread carefully. They already pushed back against two junk-bond sales last week. It stands to reason that borrowers should be more keen to sweeten terms in return for locking in funding before Nov. 3. But most important, investors need to remember that speculative-grade companies aren’t immune from going bust, no matter how wide open the debt markets might be. Junk-rated bonds, backed by a business that can’t make it through the pandemic, are just junk.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

DALLAS, Oct. 20, 2020 (GLOBE NEWSWIRE) — Dave & Buster’s Entertainment, Inc., (NASDAQ:PLAY), (“Dave & Buster’s” or “the Company”), an owner and operator of entertainment and dining venues, today announced that its indirect wholly-owned subsidiary, Dave & Buster’s, Inc. (the “Issuer”), has priced $550 million in aggregate principal amount of its 7.625% senior secured notes due 2025 (the “Notes”) in a private offering (the “Offering”) that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). This represents an increase of $50 million from the amount initially offered. The Notes will be guaranteed on a senior secured basis by the same subsidiaries of the Company that currently guarantee its Term Loan Facility (the “Term Loan Facility”) and Revolving Credit Facility (the “Revolving Credit Facility,” and, together with the Term Loan Facility, the “Credit Facility”). The Offering is expected to close on October 27, 2020, subject to customary closing conditions.The Company expects to use the proceeds from the Offering (less certain fees and expenses in connection therewith) to repay all amounts outstanding under its Term Loan Facility and to repay drawings under its Revolving Credit Facility, which, subject to the terms thereof, will be available to be drawn in the future for general corporate purposes and future liquidity. Upon the closing of the Offering, and after giving effect to the use of its proceeds, on an as adjusted basis as of August 2, 2020, the Company estimates that its available liquidity would total approximately $348.2 million, subject to the actual amount of the Company’s cash on hand and the availability of drawable amounts under its amended Revolving Credit Facility. This amount would be in excess of a $150 million minimum liquidity covenant under the Company’s Revolving Credit Facility. The Company will remain subject to this covenant until it delivers its compliance certificate under the Revolving Credit Facility for the quarter ending on or about April 30, 2022.In connection with the Offering, the Company entered into additional amendments to its Credit Facility that among other things provide for a two-year maturity extension of the Revolving Credit Facility to August 17, 2024, a suspension for certain ratio maintenance covenant requirements until the end of the fiscal quarter ending on or about April 30, 2022 and a $150 million minimum liquidity covenant. The effectiveness of these amendments is conditioned upon the issuance of the Notes.The Notes will be offered only to qualified institutional buyers in accordance with Rule 144A under the Securities Act and to non-U.S. Persons in accordance with Regulation S under the Securities Act. The Notes will not be registered under the Securities Act or any state securities laws. As a result, they may not be offered or sold in the United States or to, or for the benefit of, any U.S. persons except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, any securities, nor shall there be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Any offering of securities will be made only by means of the confidential offering memorandum.Forward-Looking StatementsThis communication includes certain statements that may constitute “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will” or words of similar meaning, and include statements regarding the proposed Offering, the closing thereof, the use of proceeds thereof and the effectiveness of the Second Amendment. Forward-looking statements are based on management’s current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially from those in the forward-looking statements and factors that may cause such a difference include, but are not limited to, risks and uncertainties related to: (i) the Issuer’s ability to complete the proposed Offering on favorable terms, or at all, (ii) further rating agency actions and downgrades in Dave & Buster’s financial strength ratings or those of its subsidiaries; (iii) changes in applicable laws or regulations; (iv) other risks and uncertainties described in Dave & Buster’s Annual Report on Form 10-K, filed with the SEC on April 3, 2020 (as amended on May 14, 2020), and Dave & Buster’s Quarterly Reports on Form 10-Q, filed with the SEC on June 11, 2020 and September 10, 2020, respectively. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on Dave & Buster’s consolidated financial condition, results of operations, credit ratings or liquidity. Accordingly, we caution you against relying on any forward-looking statements. Further, forward-looking statements should not be relied upon as representing Dave & Buster’s views as of any subsequent date, and Dave & Buster’s does not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.For Investor Relations Inquiries:Scott Bowman, CFO Dave & Buster’s Entertainment, Inc. 972.813.1151 scott.bowman@daveandbusters.com