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Moody's rates Dunkin B3, loan B1, notes Caa2
Moody's Investors Service said it assigned Dunkin Finance Corp.'s proposed $100 million guaranteed senior secured revolving credit facility due 2015 and $1.25 billion guaranteed senior secured term loan B due 2016 B1 (LGD 3, 31%) ratings.
Moody's said it also assigned a Caa2 (LGD 5, 85%) rating to the company's proposed $625 million of senior unsecured notes due 2018, and B3 corporate family and probability of default ratings.
The outlook is stable.
Proceeds from the proposed financing will be used to re-finance existing debt at Dunkin Brands Inc. and fund the payment of a $500 million dividend to the company's shareholders.
The ratings reflect the company's high leverage for the proposed capital structure, and the expectation that high unemployment and intense promotional activity by competitors will continue to pressure operating performance, Moody's said.
The ratings are supported by the company's meaningful scale, multiple concepts which add diversity, franchise based business model that is less capital intensive and has lower earnings volatility, and adequate liquidity, the agency said.
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