Moody's cuts Wendy's, rates loan Ba1

Moody's Investors Service said it lowered the corporate family and probability-of-default ratings of Wendy's International, Inc. to B1 from Ba3 and senior unsecured ratings to B2 (LGD4, 63%) from Ba3 (LGD4, 54%).

Moody's also assigned a Ba1 rating (LGD1, 9%) to Wendy's proposed $200 million senior secured revolving credit facility.

The outlook is stable.

The downgrade reflects the company's weaker-than-expected operating performance and debt protection measures as a deteriorating consumer environment, cost inflation and competitive pressures continue to weigh heavily on earnings and margins, according to the agency.

The B1 corporate family rating reflects Wendy's moderately high leverage and relatively low margins for the current rating, adequate liquidity, strong brand recognition and relatively stable revenue stream, Moody's said.

Wendy's operating performance is being hurt by a deteriorating consumer environment, cost inflation and competitive pressures, the agency noted.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.