S&P ups AFC, rates loan B+

Standard & Poor's said it assigned its B+ rating to AFC Enterprises Inc.'s planned $250 million secured bank loan. A recovery rating of 4 was also assigned to the loan.

Borrowings, along with the proceeds from the sale of Church's Chicken, will be used for a shareholder transaction and to repay the company's debt.

At the same time, S&P raised its corporate credit rating on AFC to B+ from B. The rating was removed from CreditWatch positive. The outlook is stable.

S&P said the ratings reflect AFC's participation in intensely competitive quick-service sector of the restaurant industry, increased competition from larger hamburger chains and a highly leveraged capital structure.

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