Moody's rates Mrs. Fields notes B3

Moody's Investors Service said it assigned ratings of B3 to both tranches of the proposed senior secured note issue of Mrs. Fields Famous Brands LLC and also confirmed the rating for the $140 million 10 1/8% senior notes due 2004 of Mrs. Fields Original Cookies Inc. at Caa1.

Moody's assigned a B3 rating to the $70 million of Mrs. Fields Favorite Brands' 9% seven-year senior secured notes and $121.7 million 11% seven-year senior secured notes, as well as a senior implied rating of B3 and an issuer rating of Caa1.

The outlook is stable.

Together with about $18 million of incremental support from the equity sponsors, the new debt at Mrs. Fields Famous Brands will support the integration of Mrs. Fields Original Cookies' franchise and mail-order operations with TCBY Systems LLC. All debt at Mrs. Fields Original Cookies and TCBY will be replaced with the new Mrs. Fields Favorite Brands notes.

Moody's said the ratings recognize the company's weak debt protection measures and the mediocre recent performance in the cookie and yogurt segments, while also acknowledging the high operating margins from franchisee royalties and the company's position as a leading franchiser of bakery and frozen yogurt retailers.

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