Moody's ups OSI loans, rates loans Ba3

Moody's Investors Service said it affirmed OSI Restaurant Partners, LLC's corporate family rating at B1 and assigned a Ba3 (LGD2, 25%) rating to the company's proposed $200 million senior secured term loan A due 2019 and $400 million senior secured revolver due 2019.

In addition, the agency upgraded OSI's $975 million term loan B rating due 2019 and $225 million existing senior secured revolver due 2017 to Ba3 (LGD2, 25%) from B1 (LGD3, 43%).

OSI's speculative grade liquidity rating was upgraded to SGL-1 from SGL-2 and the probability of default rating was lowered to B2-PD from B1-PD.

The outlook is positive.

Proceeds from the proposed $200 million term loan A and about $200 million from the proposed $400 million revolver will be used to repay roughly $400 million of outstanding borrowings under the company's term loan B.

Moody's said the Ba3 rating on the secured bank facilities reflects the use of a 65% family recovery rating versus 50% due in part to the presence of financial maintenance covenants for the proposed term loan A as well as the senior position the facilities represent within the company's liability structure and the significant amount of liabilities - predominantly lease rejection claims - that are subordinated to these facilities.

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