Moody's cuts Perkins

Moody's Investors Service said it downgraded Perkins & Marie Callender's probability of default and corporate family ratings to Ca from Caa3 and the company's $190 million of senior notes due 2013 to C (LGD 5, 73%) from Ca (LGD 5, 73%).

The outlook remains negative.

The speculative-grade liquidity rating was affirmed at SGL-4.

The downgrade and the negative outlook reflect the view that Perkins will likely default on its debt obligations in the very near-term, the agency said. The company did not make its interest payment of about $9.5 million due April 1 on the $190 million of notes.

Moody's views the default probability as high given the company's very weak liquidity, the agency said.

The Ca corporate family rating also incorporates the high probability of debt impairment within the capital structure given the company's very high leverage relative to its cash flow generation and asset base, the agency said.

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