Moody's lowers Vicorp to SGL-3

Moody's Investors Service said it lowered Vicorp Restaurants, Inc.'s liquidity rating to SGL-3 from SGL-2, reflecting Moody's expectation that the company's liquidity position will likely weaken over the next 12 months due to increasing capital expenditure requirements related to restaurant unit growth.

Moody's said it expects that free cash flow generation will be marginally positive after covering working capital and projected capital expenditure requirements over the next four quarters but that the company will remain in compliance with its bank loan covenants to ensure uninterrupted access to the $30 million secured revolving credit facility, which is not rated by Moody's.

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