Moody's: Caribbean Restaurants view negative

Moody's Investors Service said it affirmed Caribbean Restaurants, LLC's corporate family rating of Caa1 and $146 million senior secured second-lien notes due 2012 rated B3 (LGD3, 39%).

The outlook was revised to negative from stable.

The outlook revision reflects expectation that Caribbean's operating and credit metrics will remain weak for the coming year, driven by negative guest traffic at its 175 Burger King franchised restaurants in Puerto Rico, according to the agency.

"Our previous stable outlook anticipated at least break-even free cash flow," Moody's analyst John Zhao said in a statement. "The affirmation of the CFR, however, reflects Caribbean's operating performance will likely be within Moody's expectation, though at the lower end."

The Caa1 corporate family rating reflects Caribbean's geographic concentration and limited scale and revenue base, as well as the challenges the company is facing in reversing the negative traffic trend in light of high unemployment rate and weak consumer spending on the island, the agency said.

Ratings benefit from the strong name recognition and leading position of Burger King brand in the Puerto Rico segment, a seasoned management team and the company's exclusive development agreement within Puerto Rico, the agency noted.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.