Moody’s gives KFC Holding notes B1

Moody's Investors Service said it assigned a B1 rating to KFC Holding Co.'s proposed $500 million senior unsecured note offering.

KFC Holding is a direct wholly owned subsidiary of Yum! Brands, Inc. (Ba3 corporate family rating/stable).

Net proceeds are expected to be used to repay about $260 million outstanding under KFC Holding's revolving credit facility as well as to pay fees and expenses. The remainder will be used to make a cash distribution to Yum! Brands to fund share repurchases, dividends to shareholders and/or repayment of debt.

Moody’s said the Ba3 corporate family rating reflects Yum!'s significant scale, geographic reach, brand diversity and franchise based business model, which helps to add stability to revenues and earnings as compared to some other restaurant operators and reduces overall capital requirements.

The ratings also factor in the reduced earnings volatility that result from Yum!'s goal of becoming at least 98% franchised by the end of 2018 as well as the company's very good liquidity.

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