Moody’s changes Checkers view to stable

Moody’s Investors Service said it revised Checkers Holdings, Inc.’s outlook to stable from negative.

The outlook reflects the company’s improved same-store sales performance over the past several quarters, adequate liquidity and absence of any near-term maturities, Moody’s said.

The agency also added LD designation to Checkers’ probability of default rating, making it Caa2-PD/LD and concurrently affirmed Checkers’ ratings, including the Caa1 rating on its senior secured first-lien term loan and revolver.

The LD appendage follows Checkers’ conversion of $52 million of the accreted value of its second lien secured into new series C payment-in-kind preferred equity. Moody’s said it considers the exchange of debt to preferred equity a distressed exchange, which is a limited default under Moody’s default definition. It will remove the /LD designation after three days.

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